It’s not true fine is excluded from severe sentence (3)
I believe the answer is:
lie
'it's not true' is the definition.
'fine is excluded from severe sentence' is the wordplay.
'fine' becomes 'f' (abbreviation).
'is excluded from' is a deletion indicator.
'severe sentence' becomes 'life'.
'life' with 'f' taken away is 'LIE'.
(Other definitions for lie that I've seen before include "Fabrication" , "Stay hidden" , "Equivocate" , "Be prone - misrepresent the facts" , "Fib - be prone" .)