This one is so common, it makes me wonder if anyone actually gets taught the difference between them by any educator they've encountered since Grade 1.
It's is a contraction of "It is". Use it in casual writing; e.g. It's a great day.
Its is a possessive pronoun. Example: The dog is chasing its own tail.
To summarize, it's = it is, whereas its = its.
It’s versus Its
Andrea Ong 
There are a number of areas where individuals find themselves making similar mistakes or perhaps better said… falling into the same trap.
For example, using the proper term when there are three choices to pick from (there, their, and they’re). The difference are obvious to the trained eye, but are not so obvious to most. Which leads us to the weird and wonderful world of homonyms. Other areas to be explored include when to use That or Which. This can easily become a lesson in English grammar and punctuation.