How can I include an image from the same destination folder as of the document as Markdown in Visual Studio Code?
I tried this, but it didn't work:

Copy an image. Hit ctrl+alt+v to paste image to markdown document.
If the image is in the same directory as the Markdown file, you can use either:
 
For a workspace layout like:
docs/ images/ img.jpg README.md
In README.md
, this would be either:
 
Question is old, however, I found a very nice plugin within visual studio code Paste Image
As the plugin suggests you can paste the image onto markdown file by pressing ctrl(cmd) + Alt +V.
Or
Open command palate pressing ctrl(cmd) + shift + p and select paste image. In the background the plugin creates a image file with date/time and puts reference on the markdown.
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