XML transformation automation

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I have a desktop application which takes an XML file as an input. I have to create new XML file when new functionality gets introduced to the application.

The format of the new XML is 80% similar to existing one. Hence automation of this XML will reduced my time by 80% for new enhancement.

I already thought about XSD, but I don't know if this is the right way or not.

Or is anything else possible for XML transformation automation?

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