I am not a legal expert but there are a number of ways you can reduce the tax burden. Here are some tips:
1) Income till Rs 250000 is non-taxable. Thus, if your profit is below 250000, you will not have to pay any tax.
2) You can deposit additional Rs 150000 in schemes like PPF (Public provident fund) to save tax on that amount. PPF also gives good interest rate and thus it is better to keep money there in comparison to FD or savings account. So, you need not pay any tax till Rs 400000 income if you deposit Rs 150000 in PPF.
3) Now since, you are getting the money in PayPal account or say in your bank, you can ask some of your clients to make payment to another paypal id or bank account as well. If you have an unemployed relative, you can create the accounts on his name and receive additional Rs 400000 this way. This is best in case you have a wife or mother who is unemployed (housewife). To be on the safe side, teach them the work as well and you may get some work done by them as well. This will come handy in case that person is asked regarding proofs of his/her income source. This is actually, one of the benefits of online work. In your case (Rs 60000 per month or 7.2 lakhs per year), you need not pay any taxes by taking help of another unemployed relative (as you can save tax for upto Rs 800000 as described above).
Note that I do not support any illegal or unethical ways (and there are many such ways) to save taxes. I support taxes especially in India, as it is for the benefit of poor. How that tax money is being used (or misused) is debatable. Better adapt to the rules and you may consult a CA if you are doing big transactions.