" It's " is the short form of " It is ". You can use " It's " at the place of " It is ". " It's " is a compound form of pronoun and a verb. On the other hand, " Its " is a possessive case. Generally we use apostrophe (') in most of the possessive cases. But notice, here we are not using apostrophe ('). Example: i) It is my pen. [Correct] =>It's my pen. [Correct] ii) This pen is mine. It's color is red. [Incorrect] => This pen is mine. Its color is red. [Correct]