Both forms are correct. Its and it’s are both correct forms and at the same time two different structures. What makes them similar is almost the same spelling, only an apostrophe distinguishes them, and they are also homophones. Besides, these superficial similarities hide different functions and meanings. Its is a possessive determiner of a pronoun it that describes belonging to things or animals. And it’s is a contraction of it is or it has depending on the context.

Correct spelling, explanation: a possessive form of a pronoun it and expresses the belonging to things or animals.

Correct spelling, explanation: a contraction of either it is or it has.

Definition of its:
pronoun: related to or belonging to something;
Our new house has its own small beach and nice, peaceful garden.
My lizard lost its tail recently, I hope it will grow back soon.

Definition of it’s:
Contraction of:
– it is: verb to be in the third person singular; to live, happen, occur, take place;
It’s already September, this year flies so quickly.
It’s my turn to wash the dishes.
– it has: verb to have in the third person singular; to hold, possess, receive, take;
It’s been a very long, hard day, I deserve some rest.
My bag is always so heavy, it’s got a ton of stuff inside, but I need it all.