The Indian opener had made 84 and loomed as his team's last slim hope for a draw when he tried to hook Pat Cummins.
The Australians immediately reviewed the not-out call and that prompted a lengthy look at the footage by the third umpire.
Indian fans roared their approval when the "snicko" was played on the scoreboard and it showed no clear noise.
But the footage also clearly showed a deflection and, eventually, Jaiswal was given out to leave India 7-140.
Jaiswal was India's big hope after bringing up his half century. (James Ross/AAP PHOTOS)
While Jaiswal was fuming, former Australian captain Ricky Ponting was in no doubt it was the right decision.
"It clearly hit the glove. And I caught it at the time, Jaiswal actually started to walk," Ponting said on the Seven Network.
"As soon as the Aussies went upstairs he started to take a couple of steps away.
"Snicko hasn't proven it to be correct, but the umpire picked up the deflection and froze it where the ball was on the end of the glove. As far as I'm concerned, there is no argument whatsoever."
But fellow commentator Justin Langer noted there will be fallout.
"This is going to be mightily controversial. While it looked like it came off the face of the bat and glove, the snicko said it didn't," said Langer
"This will be a big talking point post- match."
Former umpire Simon Taufel said on Seven that the third umpire made the right call, saying the deflection was conclusive on the video, regardless of snicko.
After he attempted a rash single in the first innings and was run out for 82 when Virat Kohli refused to take the run, Jaiswal was the subject of further controversy on Monday.
Apart from his dismissal, he was given not out when on 31. The Australians reviewed the call and the video strongly suggested the ball would have hit the top of leg stump.
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