Correctly punctuated.

**The reasoning** The word we need here is a contraction of "it is" → "it's" (with an apostrophe). When you say "It's raining," you're actually saying "It *is* raining." The apostrophe replaces the missing letter 'i' from "is." This is the standard rule for contractions in English. Remember: **"it's" = "it is"** or **"it has"** While: **"its" = possession** (like "the dog wagged its tail") **Why the wrong options tempt you** **A) Its** — This means possession (belonging to something), not "it is." Many students mix these up because they sound identical when spoken. **C) Its'** — This form doesn't exist in English! The apostrophe is wrongly placed after the 's'. Students sometimes create this thinking all possessives need apostrophes, but "its" is already possessive without one. **D) Its raining, outside** — Wrong word AND unnecessary comma. That comma breaks the natural flow of the sentence. **Quick takeaway** If you can replace it with "it is" or "it has," use **it's** with the apostrophe; if it shows ownership, use **its** without one.