I got it= wrong but popular. I understand it= correct,formal and should be used.

"I got it" is usually used more in the sense of "I'm on it" or "I'll take care of it and"I understand it " is usually used more in the sense of " "I get it",,,,got can be used as both "i understand" and "i picked it up" or "I have it"

"I got it" is used in friendly conversation, it's a colloquial style. "I undestand it" is a neutral one, more formal

I got it can be for things other than understand. I got the ball... It is much less formal than other choices such as I have it or I understand it - but got is very versatile in that it can say that you have so many different types of things in an informal way.