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I am new to GIS and also QGIS tool.

There are two layers imported into the qgis project. Layer-1 (green) has attributes ID, area, code Layer-2 (brown) has attributes station, shp_area, name.

I want to divide the polygons by overlapping and then add a new field value with the divided polygon's respective area. Other fields will remain the same of Layer-1 For e.g. Along the border of one polygon (brown border), a larger polygon (green) was divided into two polygons. The total area before division was 125sqm. After division (shown in red), the areas respectively became 70sqm and 55sqm.

I want to do this in the entire shapefile and store the new output (divided green areas) as Red-layer.

A sample Input(left) and Output(right)

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    Vector > Geoprocessing Tools > Union will do the job. – wiltomap Nov 19 '15 at 14:11
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    Wiltomap: May I suggest giving this as a formal answer so we can mark up the question as answered? – Hairy Nov 19 '15 at 15:28
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This operation is called union or intersection. Intersect will keep only the area of overlap while union keeps the non overlapping geometries. The tools are located in Vector > geoprocessing menu.

Once you've created the new feature, update the area of the polygons with the field calculator.

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