Taken from http://www.elearnenglishlanguage.com/difficulties/its.html
It's is a contraction of "it is" or "it has."
It's time to go.
Do you think it's ready?
I read your article - it's very good.
Do you know where my purse is? It's on the table.
It's been a long time.
Its is the possessive form of "it."
That's an interesting device - what is its purpose?
I saw Les Misérables during its initial run.
This stove has its own timer.
The bird lost some of its feathers.
Where is its head office?
The Bottom Line
The confusion between it's and its occurs because on virtually every other word 's indicates possession, so English speakers naturally want to use it's to mean "something belonging to it." But it's is only used when it's a contraction of it is or it has.The ironclad rule - no exceptions - is that if you can replace the word with "it is" or "it has," use it's. Otherwise, it's always its."
Today's lesson was brought to you by the sugar rush given to its author by eating too much Easter candy.