La0.5Sr0.5CoO3−δ system displaying coexistence of metallicity and ferromagnetism, and the interplay between distinct spin states of Co ions has gained significant attention from the fundamental as well as the applications point of view. In this regard, the effect of V5+ doping on the dynamics of spin and oxidation states of Co ions in the La0.5Sr0.5CoO3−δ system has been studied using structural, X-ray photoemission spectroscopy, magnetic and transport measurements. The La0.5Sr0.5Co1−xVxO3−δ (x = 0, 0.01, 0.02 and 0.1) series was prepared by conventional solid-state reaction method and its chemical homogeneity was established by inductively coupled plasma mass spectroscopy. The increase of lattice parameters/volume with increasing V5+ content in rhombohedrally crystallized (R3-c) samples is attributed to the presence of Co2+ ions . The presence of Co2+ ions and the reduction of Co3+ ion concentration with V substitution is verified from the results of core-level photoemission spectra of Co. Detailed magnetic measurements show an increase in Curie temperature, effective magnetic moment, soft magnetic nature and suggesting strengthening of underlying magnetic interactions. As a result of multiple oxidation states of Co ions and the delocalization of electrons, rise in the conductivity is noticed. Such enhancement in the conductivity and ferromagnetic ordering temperature, simultaneously, with V doping implies a strong coupling between spin and charge degrees of freedom. To understand the underlying mechanism more clearly, different possible scenarios have been discussed. The most appropriate scenario i.e., the conversion of Co3+ ions into Co2+ ions and admixture of Co4+ ion spin states with V5+ doping was found to be consistent with all the experimental observations.