You definitely need the apostrophy as the meaning of
it's = it is and
its = sth. belongs to it are two very different things.
The dog bites its bone. makes sense.
But
The dog bites it's (= it is) bone. does not!!
Also
It's (=it is) time to go. is perfectly fine.
But
Its time to go. whose time are you talking about then???
You always, always need to put the apostrophe (in the correct place!) where it is needed!
A nice book I can recommend that deals with similar problems is "Eats, Shoots and Leaves" by Lynne Truss. Have fun reading it
