PALLEKELE, Sri Lanka, Aug 13 (Reuters) - Left-arm wrist-spinner Kuldeep Yadav picked up four wickets for 40 as India bundled out hosts Sri Lanka for 135 in their first innings for a lead of 352 on the second day of the third test on Sunday.

India were earlier all out for 487 in their first innings in the first over after lunch after Sri Lanka left-arm spinner Lakshan Sandakan took a five-wicket haul for the first time in tests.

All-rounder Hardik Pandya was out for 108 after scoring his first test hundred and was the last batsman to be dismissed for India, who lead the three-match series 2-0.

Sandakan finished with 5-132, while left-arm spin colleague Malinda Pushpakumara took 3-82 for the hosts.

(Reporting by Sudipto Ganguly in Mumbai; Editing by John O'Brien and Pritha Sarkar) ((sudipto.ganguly@thomsonreuters.com; +91 22 6180 7264; Reuters Messaging: sudipto.ganguly.thomsonreuters.com@reuters.net))