Actually, as a native speaker I don't really think so if there's a special rule about this one.
But the word 'Itu' itself has several function such as :
Mobil itu = That car Buku itu = That book
Mostly, 'itu' means that for a THING.
So that + thing = Itu
But we can also use 'itu' as : 'is' 'am' or even 'are' for when it comes to a verb.
For example :
Mereka itu jahat = They ARE evil.
Saya itu baru disini = I AM new here
Dia itu malas = He/She IS lazy.
I guess that was the answer of your question, hope it'll help :)