it's: a contraction of "it is"
its: the possessive form (things belonging to it)
It's very simple, just follow this single rule for its proper use:
When writing "it's", mentally insert the word "is" in place of the apostrophe. If that doesn't express your meaning, TAKE OUT THE APOSTROPHE.
It's driving me nuts: It is driving me nuts.
Correct meaning, keep the apostrophe.
The pan lid lost it's handle: The pan lid lost it is handle.
Incorrect meaning, TAKE OUT THE APOSTROPHE, use "its handle".
That's it. Nothing else to remember. Learn it. Love it. Live it.