(1) The Principal Act is amended -

(a) in section 201 by substituting the following for subsection (2):

"(2)

(a) Income tax shall not be charged by virtue of section 123 in respect of the following payments:

(i) an amount not exceeding €200,000 of any payment made -

(I) in connection with the termination of the holding of an office or employment by the death of the holder, or

(II) on account of injury to or disability of the holder of an office or employment;

(ii) any sum chargeable to tax under section 127;

(iii) a benefit provided pursuant to any retirement benefits scheme where, under section 777, the employee (within the meaning of that section) was chargeable to tax in respect of sums paid, or treated as paid, with a view to the provision of the benefit;

(iv) a benefit paid in pursuance of any scheme or fund described in section 778(1).

(b) Where paragraph (a) (i) applies to any payment, or any part of a payment -

(i) the exemptions from income tax provided by virtue of any other provision of this section (other than subsection (1A)) and Schedule 3, or