Ricky Ponting and captain Michael Clarke took the Australian second innings to 50/3 after losing three wickets in three overs.
R Ashwin gave India the first breakthrough when he dismissed David Warner by making him play across the line to a delivery but the opener ended up giving a simple catch to Ashwin.
Zaheer Khan struck in the next over when he trapped Shaun Marsh plumb in front of the wicket for a duck.
Ashwin then took his second wicket in the next over when he trapped Ed Cowan plumb in front of the wicket.
Earlier, India were bundled out for 272 runs in their first innings but with a lead of 332 runs, Australia did not enforce a follow-on.
The Indian innings ended when Virat Kohli (116) was trapped plumb in front of the wicket by Ben Hilfenhaus, who in his previous over had clean bowled Ishant Sharma.
Kohli's hundred is the first century by an Indian batsman in this series.
Peter Siddle registered his fifth five-wicket haul as he dismissed R Ashwin and Zaheer Khan off successive deliveries.
Ryan Harris clean bowled Wriddhiman Saha to reduce India to 225/6 at tea.
Saha (35) played well to add 114 runs with Virat Kohli for the sixth wicket.
This is only the third hundred-run partnership for India in this series.
Kohli hit his fourth half-century, his second of the series, to lend some respectability to the Indian total.
Kohli and Saha played well after resuming the Indian first innings after lunch.
Trailing Australia by 482 runs, India were struggling at 122/5 at lunch.
Nathan Lyon had VVS Laxman (18) caught behind by Brad Haddin as India lost half of their side with just over hundred runs on the board.
It was a good length delivery from Lyon that did the trick. The ball was just a bit short outside off and shaped in slightly after pitching. Laxman remained on the back foot and tried to run it down to third man, but failed to do it cleanly and nicked it into the gloves of Haddin.
Peter Siddle gave Australia crucial breakthrough as he first got rid of Sachin Tendulkar and then Gautam Gambhir in a span of just nine runs. India lost their four wickets inside 90 runs.
Siddle banged in a bouncer to Gambhir who couldn't negotiate and the ball just popped up in the air at gully where Michael Hussey held on a great diving catch to seal Gambhir's fate.
Gambhir contributed 34 runs that came off in 94 balls with the help of four boundaries.
Master blaster Sachin Tendulkar, who resumed India's battle alongwith Gautam Gambhir to save the fourth Test on Day 3, could not do much despite being in good touch.
Tendulkar, who scored only 25, started of well but edged Siddle's full-length delivery which went to second slip where Ricky Ponting grabbed a fine low catch to send Tendulkar back to the pavilion. India lost their third wicket at the score of 78.
On Day 2, India lost two early wickets in their first essay in the form of Virender Sehwag (18) and Rahul Dravid (1) after Australia rode on double centuries by skipper Michael Clarke and Ricky Ponting to declare at a mammoth 604/7 on Day 2.
India were at a shaky 61/2 in reply from the 21 overs possible bowled by Australia on the second day of the fourth Test.
Gautam Gambhir (30*) and Sachin Tendulkar (12*) were at the crease with India had still 543 runs in arrears.
Clarke, resuming on 140, made 210 and was out immediately after lunch when a Umesh Yadav delivery flicked his pads and crashed on to his stumps.
Ponting departed much later for 221 when he pulled Zaheer Khan firmly but straight to Sachin Tendulkar at deep mid-wicket.
The two put on 386 runs for the fourth wicket which is the second best ever by an Australian pair. Sir Don Bradman and Bill Ponsford put on 388 runs together against England at Headingley in 1934.
Replying to Australia's monumental effort, Sehwag (18) and Dravid (1) were the two early blows India suffered in their innings and neither the pitch nor the deliveries merited their dismissals.
The first ball of Peter Siddle was a low full toss on Sehwag's leg stump. Sehwag aimed to play it on the onside but closed the face of his bat too early.
He thus miscued on the right of the bowler who somehow stuck his right hand out and caught it splendidly while still in his follow through.
Sehwag already had a slice of luck in his favour when he was dropped by Ed Cowan on five at the total 13 for no loss.
The opener had aimed to flick Hilfenhaus off his pads and the ball had gone in the air, low to Cowan's left at mid-wicket but the fielder floored the chance.
Earlier Australia, resuming at the overnight score of 335/3, batted till half an hour after tea before declaring their first innings on 604/7. In all they played 67 overs on the second day.
It was a Ponting-Clarke show yet again as they improved upon the best-ever partnership at Adelaide Oval which belonged to Graeme Pollock and Eddie Barlow of South Africa - stand of 341 runs managed during the 1963-64 series.