Not strict? That is forbidden ultimately in period of austerity (7)
I believe the answer is:
lenient
'not strict?' is the definition.
(I've seen this before)
'that is forbidden ultimately in period of austerity' is the wordplay.
'that is' becomes 'ie' ('i.e.' can be a synonym of 'that is').
'ultimately' indicates one should take the final letters.
'in' indicates putting letters inside.
'period of austerity' becomes 'lent'.
The last letter of 'forbidden' is 'n'.
'ie'+'n'='ien'
'ien' going within 'lent' is 'LENIENT'.
(Other definitions for lenient that I've seen before include "Merciful or easygoing" , "Forbearing" , "'Indulgent, easy (7)'" , "Indulgent, lax" , "Compassionate" .)