Under what conditions will true altitude be lower than indicated altitude?

True altitude will be lower than indicated altitude when the air temperature is colder than the standard temperature. This phenomenon occurs because altimeters are calibrated to assume that the atmosphere is at a standard temperature (ISA, or International Standard Atmosphere). When the actual air temperature is lower than the standard, the air is denser, and the altimeter, which measures air pressure, will read higher than the true altitude above sea level.

As the aircraft ascends into colder air, the denser air exerts more pressure on the altimeter, resulting in a higher indicated altitude compared to true altitude. In this case, the altimeter is over-reading, which can lead to a significant difference, potentially causing the pilot to believe they are at a higher altimeter setting than they actually are. This situation highlights the necessity for pilots to understand and compensate for temperature deviations from standard when interpreting altitude information effectively.