A commonly used software tool for version control in coding is Git, an open-source system. Git enables multiple developers to collaborate on projects by tracking changes to code, managing branches, and merging updates seamlessly. It provides a complete history of all modifications made, allowing rollback to previous versions if necessary. Git enhances teamwork by resolving conflicts that arise from simultaneous changes by different contributors. Additionally, it integrates with platforms like GitHub or Bitbucket, facilitating remote collaboration and sharing of code repositories. Ultimately, Git is essential for maintaining code integrity and collaboration.