How to Merge two images and create new Design?

There are different ways to Merge two images and create new design

Method 1

1. Keep two designs on two layers, one as the background layer and other as the top layer.

2. Select the portion of design at the top layer which you want to remove using Magic Wand tool (Shift + Magic Wand).

3. Delete the selected portion.

You will get the output as shown below

Method 2

1. Keep two designs on two layers, one as the background layer and other as the top layer.

2. Staying on the top layer, double click on it.

3. You can now choose the different blending options or change the Opacity from the Layer Properties to get a new effect.

Please note that the number of colors may increase on doing this.