After Pat Cummins claimed two wickets in an over to restrict India to 3-33 at lunch, star opener Yashasvi Jaiswal is steering the tourists out of trouble as they still require 228 for a miracle win.
Jaiswal has faced 159 balls for his unbeaten 63, with even aggressive wicketkeeper Rishabh Pant (28no from 93 balls) restraining himself for India's cause to save the match.
However, Jaiswal was fortunate to survive on 31 when the beneficiary of a contentious umpire's call.
Australia were fuming after Jaiswal was struck on his back pad and given not out, with the on-field decision remaining despite DRS showing the ball would have hit the top of leg stump.
If on-field umpire Joel Wilson had given Jaiswal out, India would have lost their fourth wicket, even if the young gun had used a review.
Mitchell Starc celebrates taking Virat Kohli's wicket late in the first session on day five. (James Ross/AAP PHOTOS)
Chasing an MCG run chase record of 340, India have effectively ruled themselves out of winning the fourth Test by going at a run rate of just more than two per over.
India only need to draw the five-match series - currently locked at 1-1 - to retain the Border-Gavaskar trophy for a record-extending fifth-straight time.
Jaiswal and India captain Rohit Sharma carefully saw off the first 16 overs until Cummins (2-10) produced six balls of magic.
The Australian captain removed his opposing skipper, Rohit, with a ball that was juggled and caught by Mitch Marsh at gully.
Five balls later, in-form No.3 KL Rahul edged Cummings to first slip for a duck, boosting Australia's hopes of going 2-1 up in the series.
Mitchell Starc dismissed veteran superstar Virat Kohli (five), who once again was caught behind the wicket, to bring about lunch.
Australia added only a further six runs on Monday as they were bowled out for 234 in the second over of day five, giving them a lead of 339.
Nathan Lyon (41) and Scott Boland (15 not out), Australia's No.10 and 11, made 61 in a crucial last-wicket stand that shot the lead past the 300 mark and frustrated India.
Jasprit Bumrah's fifth wicket was an absolute belter! — cricket.com.au (@cricketcomau) #AUSvIND | #DeliveredWithSpeed | @NBN_Australia pic.twitter.com/vfDI5gEN3nDecember 29, 2024
A bumper crowd of almost 70,000 is inside the MCG for what could be a defining day for this generation of Australian players.
A total of 370,700 fans has already attended this Boxing Day Test, breaking the all-time MCG record crowd of 350,534 in the 1936-37 Ashes series, when Sir Donald Bradman was king.
The highest successful Test run chase at the ground was nearly a century ago, when England made 7-332 to beat Australia in 1928.
Australia's recovery from a shaky 6-91 late on Sunday - also helped by Cummins' 41 - was the latest twist in an epic Test full of momentum swings.
India superstar Jasprit Bumrah finished with 5-57, giving him nine wickets for the Test and 30 for the series.
Jasprit Bumrah was yet again the hero with the ball for India. (James Ross/AAP PHOTOS)
Just as Nitish Kumar Reddy and Washington Sundar turned India's fortunes around on Saturday with their superb eighth-wicket stand, Reddy feels one good partnership on Monday will set up India.
Starc noted the absorbing contest was the perfect counter to some commentary that Tests should be shortened to four days.
"This is why we've got five days for a Test match and really stick it up those who want four days," he told ABC Radio.