In the vscode terminal type the following:
python -m venv venv

# If you created a virtual enviroment and vscode is not detecting it then
# follow the steps
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step1> on your keyboard press ctrl + , (it will open setting)
step2> search venv (this will show two option)
step3> You will see "add item" button in a option named "Python: Venv Folders"
click on that
step4> Navigate to directory where your virtual env folders reside for example
by default conda environments are located in "C:\Users\name\anaconda3\envs"
folder. So you can add this directory
step5> Now vscode will show all virtual environment
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