A method, system and computer program product for generation and management of incremental backups of VEE file system using bitmaps. The proposed method allows users to roll back to any previous version or state of the VEE file system and to instantiate this version using the data encapsulated in virtual disk storage (i.e. file system) of the VEE. A number of VEEs run on a Host Operating System of the computer system. One of the VEEs implemented on the computer system is designated to generation and management of backups of the virtual disk data of the other VEEs without freezing the file system during the entire backup process. A special tracing application runs on the designated VEE for generating the bitmap of a file system snapshot. The user can also set up a time for generating a backup or create a schedule for automatically generating the backups at critical points.