• A Quiz on Its/It's and Their/There/They're
• Avoid These 10 Words in Formal Writing

Examples:

• Sal placed the ring back in its box and returned it to the safe.

• It's a beautiful day in the neighborhood.
• "It's been a long day," Granny said, "and we're all rather tired."
• When the landlord asked about this month's rent check, Kim said, "It's on its way."

Usage Notes:

• "Its is a unique construction because this possessive word quite frequently gets mistaken for its cousin it's. To keep the meanings straight, you need to remember just two things:

  - Possessive pronouns don't have apostrophes.
  - It's is a contraction meaning it is. Try substituting its or it's with it is or it has, and see if the sentence still makes sense. If it doesn't, you know not to use the apostrophe."

  (Lara M. Robbins, Grammar And Style At Your Fingertips. Alpha Books, 2007)
• "Its without the apostrophe is a possessive pronoun/determiner, pure and simple, as in left the dog on its own. Like the other pronouns in those roles (his, hers etc.), its has no apostrophe. What confuses the issue is the fact that nounsdo have apostrophes when they are possessive, as in the dog's breakfast or a baker's dozen, suggesting that it's is the possessive pronoun for it. . . . In fact it's was used interchangeably with its for the possessive pronoun until around 1800, according to the Oxford Dictionary (1989). . . .
  
  "From its debut in early C19, contracted it's has become increasingly common in everyday writing . . .. It compacts the space occupied by the functional words of the sentence, and like French c'est ('it is') enhances the flow of expositoryprose."
  (Pam Peters, The Cambridge Guide to English Usage, Cambridge University Press, 2004)

Practice: