First following important points to note :

1. The adsense is taxable for all residents of India.
2. The earning can be shown as either income from profession or income from other sources. The basic difference between two heads is that if you are carrying on the blog writings on a continuous basis , it shall fall within the meaning of profession even if your prime earning may be from something else. However , there can always be difference of opinion. In my view, best is to show as income from profession .
3. If your earning is above Rs 10 lacs , you will have to get your accounts audited. I do not foresee any problem on this count because there may not be any books of account , if you do not account for expense for earning such income. If you want to claim, keep one date wise expense and bank book. Pass book may itself serve as cash/bank book required for maintaining books.What I mean there is no problem case of Adsense earning as far as accounting is concerned.

Suggestion for computing taxable income from Adsense?

The basic principal of computation of business or professional income is that reduce all expense incurred for earning the professional professional income. Therefore , an income & expenditure account can be prepared on following way for adsense earning.

And file the return in Form ITR-4 . Get it from here.