Prisoner made to pay penalty in prison? (8)
I believe the answer is:
confined
'prisoner made to pay' is the definition.
I can't tell whether this definition defines the answer.
'penalty in prison?' is the wordplay.
'penalty' becomes 'fine' (a financial penalty).
'in' is an insertion indicator.
'prison?' becomes 'cond' (I am not sure about this - if you are sure you should give a lot more credence to this answer).
'fine' going inside 'cond' is 'CONFINED'.
Can you help me to learn more?
(Other definitions for confined that I've seen before include "put inside" , "Lacking freedom" , "locked up" , "Restricted" , "deprived of freedom" .)