The tourists were reduced to 12-2 by the fifth over after electing to bat before opener Lokesh Rahul and skipper Virat Kohli combined to take them to 97 for two by lunch on the opening day.
Rahul was unbeaten on 39 and Kohli was on 48, the pair having put on 85 for the third wicket in a match India must win to level the three-match series.
Sri Lanka won the first Test in Galle by 63 runs.
Rahul hit five boundaries and Kohli smashed a six off Rangana Herath besides scoring four fours.
Sri Lanka's batting great Kumar Sangakkara was welcomed onto the field in his last international match with a guard of honour by young children holding raised bats.
Opener Murali Vijay, who replaced the injured Shikhar Dhawan in one of the three changes made by India, was trapped leg-before by Prasad off the fourth ball of the innings before he had scored.
Prasad struck again in his third over when Ajinkya Rahane drove at a wide ball and edged an easy catch to Dimuth Karunaratne at third slip.
Besides bringing in Vijay, India also included all-rounder Stuart Binny and fast bowler Umesh Yadav in place of off-spinner Harbhajan Singh and paceman Varun Aaron.
Sri Lanka dropped the injured Nuwan Pradeep to play young fast bowler Dushmantha Chameera.