Translation:I sit on the chair that is marked.
"Saya duduk di kursi yang ditandai" would translates as "I sit on A chair that is marked", while "Saya duduk di kursi yang ditandai itu" would translates as "I sit on THE chair that is marked".
Although not necessarily used, "itu" there translates as "the" in English, implying definiteness--although this is rarely taught in Indonesian (we are used to the notion that Indonesian doesn't have any definite marker, while in fact there are a lot of things that can imply definiteness).
This should be "Saya duduk di kursi yang tertanda itu."
The ter- static verb (pretty much an adjective that indicates a state) construction should be used instead of the di- construction. The latter indicated that someone marked the chair and that is somehow relevant for the sentence, whereas the former says the chair is marked, but it is "static" i.e. unchanging, and the state was not/is not being brought about by any particle person.
Like "pakaian saya terbuat dari wol" instead of "pakaian saya dibuat dari wol". One is the clothes are in the state of being made, the other a subject is actively making them but has been ellipsed.