What if I sell shares on T1 day?

Is there going to be any problems?

there is no problem in selling, it’s your asset, you can sell anytime

you have to sell in cnc for that, if you sell in mis it will create a short position, but the holding will still be there.
the day you sell it will be shown in your position as short, don’t be confused with that

I read that as we follow the T+2 cycle the shares are credited on the T+2 day. Thus if I sell before that & I don’t have the shares in my demat account there could be default. Could you explain this to me?

no need to be confused with that, a lot of trader use buy today and sell tomorrow.
you can sell on t1, t2, or whenever, the holding will be zero when you sell, and end of the day it will be shown.