It's v. Its

This is a common mistake. I see this confusion every time I edit posts or articles of my teammates.

The difference is really simple.

It's is a contraction form of "It is." In some rare cases it is also the contraction form of "It has."

Its is a possessive pronoun and also called a possessive adjective. It is the possessive form of the personal pronoun "it." It means belonging to or relating to something that has already been mentioned.

Examples:

It's a hot day today. (It is a hot day today.)
The company is anticipating its third quarter profits.

Which sentence is correct?

1. Its his fault why the team lost the game.
2. It's his fault why the team lost the game.