The new banking cash transaction tax, introduced for the first time in the Budget to keep a tax trail on blackmoney, became operational from Wednesday.

The savings accounts have been totally exempted from 0.1 percent tax on cash withdrawal from banks following criticism from trade, industry and political parties.

The tax would be applicable for withdrawals of Rs 25,000 and above on a single day from current and other non-savings accounts in the banks for individuals and Hindu Undivided Families.

For business accounts, the 0.1 percent tax would be applicable for any withdrawal beyond Rs 1 lakh on a single day.

The central board of direct taxes, which issued a notification in this regard on Tuesday, made it clear that if the total withdrawal exceeds Rs 25,000 by individuals or Rs 1 lakh by businesses on a single day even through multi transactions, the tax would be effective.

Originally proposed to levy transaction tax of Rs 10,000 and above, Finance Minister P Chidambaram later scaled up the limit to Rs 25,000 after it evoked widespread criticism from industry and political parties.