I have a district boundary shapefile. I want to divide that district according to the boundaries given in image. How we can achieve it?

Can we add vector file first then add image as an overlay on it and extract the boundaries from image?

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    How accurate are you expecting your final result to be? Does any of the detail on the image match any data that you have? I am assuming the PNG is not georeferenced, there is a tutorial to explain how to get your image in the right spot qgistutorials.com/en/docs/georeferencing_basics.html then create a new layer and draw over the top of the lines in your raster, this is known as heads-up digitizing, be sure to add just a little bit outside your district. When you've added all your lines don't forget to save your edits. You should be able to intersect or cut your district. – Michael Stimson Oct 29 '18 at 6:51
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    Thanks @MichaelStimson.. its really help me a lot ! – Saurabh Yadav Oct 29 '18 at 9:28

Assuming your image is black-and-white only, you georeference it and then use extraction - contour lines to extract all the black lines as a shapefile. Since you get rather pixelated polygons, you'll then need to do some manual clean-up and maybe convert the polygons to lines, if you want to process them further.

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