It's 0.3 or 0.6 % of only the amount above rs.50,000 per day.
For example if my total cash withdrawal today is 51,000, I will pay rs.6 in tax which will not be returned ever OR rs3. in tax which will be adjusted in my tax return.
In this month (december), there are ~20+ banking days. That means you can withdraw 1,000,000 absolutely tax/burden free every month. If I withdraw 2,000,000, I will pay rs.3,000 in tax and this will be adjusted when I file my tax return. Or 6,000 if I don't file a return.
In total I can withdraw 12,000,000 (1crore 20lac) per year if I can manage it right.
Although I'm strictly against taxation and government control of any kind over anything, this tax isn't as bad as it is said to be. People should complain more about sales tax and income tax rates being too high. Also tax rates on banks.