In a way the name Sanskrit had given way to large misuse by the religion. Sanskrit is used for both the Vedic and the Puranic languages though they differ considerably. It bears the relation as between Latin and English.

the Ancient Sanskrit is referred to here is now called Vedic which is a direct recognition under pressure to recognize it as different from Sanskrit language by the Hindus. This is same as the Persian Indo- European language of the Zorostrians which is the language used in Zend Avesta or very close to it. In sharp contrast Sanskrit is of recent origin. Archealogical and Linguistic studies indicates that the language of Sanskrit came into existence only by the second century AD. Ujjayini (Ujjain) became a center of Sanskrit learning and was taken as meridian by Indian astronomers.

http://www.haryana-online.com/History/sanskrit.htm

The Indian Scripts are originated from two early sources – one from the Semitic Languages and the other from the Aryan (Indo-European) Languages. The early scripts of Brahmi originated from the Semitic Languages from the 7^th centaury BC while the Kharosti originated from the Indo-European Languages about the same time. It is interesting to note the Sanskrit Script as used today was actually an offshoot of the Semitic influence rather than Aryan. Certainly there must have been mutual influence and interaction during the development. This interaction between the two major ethnic languages can be traced back to the Persian invasion of Israel. Ahasaures, also known as Artexerxes was probably the husband of Queen Esther. From then on the relation between the Aryan and the Semitic people were very cordial. This led to the mutual influence that we see in the script and languages.

Sites of Asokan Rock and pillar edicts covers most of the North and Central India and were written in the regional languages.

Bilingual edict (Greek and Aramaic) by king Ashoka,
from Kandahar - Afghan National Museum.

Vedas were originally written using the Grantha and Nagiri Scripts. Since the earliest evidence of Grantha Scripts are found only around 5^th c AD, the Vedas in Sanskrit could not have been written anytime earlier. It may be argued that Vedas could have been in oral form. This is a conjecture. People certainly have been philosophical even without a written document. But they are not crystallized until they are written down.

Shyam Rao makes the following clear statements in regards to Sanskrit in his Anti-Sanskrit Scripture' by Shyam Rao, published by Sudrastan Books, Jabalpur, 1999 (free from any Copyright). It was thence reprinted in Dalitstan Journal, Volume 1, Issue 2 (Oct. 1999)

It is evident that there was no Sanskrit before 150 AD. Chandasa was renamed as Sanskrit inorder to claim predating Sanskrit writings.

Alexander Harris explains it as follows: http://www.appiusforum.com/sanskrit.html

"The stone pillar inscription of Samudra Gupta (AD 330 to 380) written in Sanskrit and a late Brahmi script called the Gupta script is an undated inscription incised on an Asokan pillar at Allahabad. Composed by Harisena, a commander-in-chief of the king it describes elaborately the moral, intellectual and military achievements of this king. This inscription possibly dates 350 AD.

A key evidence often presented in the dating of Sanskrit is Patanjali’s Vyakarana - Mahabhasya (Great Commentary). The Mahabhasya is both a defense of the grammarian Panini against his chief critic and detractor Katyayana and a refutation of some of Panini’s aphorisms. Patanjali is dated anywhere from 2nd c BC to 5th c AD.

On Patanjali’s date, the composition of the Mahabhasya and its early tradition, Joshi and Roodbergen write,

Sanskrit then spreads in the South evidenced by the inscriptions in Early Grantha, dating from the 5th to 6th c. AD on copper plates and stone monuments from the kingdom of the Pallavas near Chennai (Madras). The Grantha alphabet, which belongs to the writing system of southern India, was developed in the 5th c. AD to mainly write Sanskrit. From the fifth century A.D. classical Sanskrit is seen to be the dominant language in the inscriptions which indicates that Sanskrit was replacing the dialects.

Further more research on the development of writing scripts in India certainly puts a rather late date on these Sanskrit writings."

Sanskrit was developed out of Prakrit and other existing languages during the interval of 100 AD to 150 AD "The first evidence of classical Sanskrit is found as an inscription dating around A.D.150 in the Brahmi script. It records the repair of a dam originally built by Chandragupta Maurya, and also contains a panegyric in verse, which can be regarded as the first literary composition in classical Sanskrit. It is at Girnar in Kathiawar and was inscribed by Rudradamana, the Saka Satrap of Ujjayini, on the same rock on which the Fourteen Rock Edicts of Asoka were also found.

It is significant that Rudradamana employed classical Sanskrit in a region where about four hundred years before him Asoka had used only Prakrit. This definitely proves that in the second century AD Sanskrit was replacing the dialects. Even so the language did not replace Prakrit everywhere, but it continued to be used in inscriptions for something like one hundred years or even more after this date. However, from the fifth century A.D. classical Sanskrit is seen to be the dominant language in the inscriptions. ( Hinduism, by Nirad C. Chaudhuri, Oxford University Press, USA, 1979.)

"The earliest epigraphic evidence on languages employed in India comes from the inscriptions of Asoka inscribed in third century B.C. Asoka took care that his messages were intelligible to all and he used a particular kind of Prakrit. Even more remarkable is the fact, which has been recently discovered, that for those people who at the time lived in Afghanistan, his message was given in Greek as well as Aramaic. One of the Greek inscriptions is a translation of the Kalinga Edict, and the Greek of the inscriptions is not inferior in style to the classical Greek of Greek literature. In such circumstances neglect of Sanskrit by Asoka, if the language was in use, would be contrary to all his practice.1 So, the absence of Sanskrit in his inscriptions indicates that it did not exist at that time, as otherwise he would have certainly used it." Dr. Alexander Harris: Significance of Sanskrit.

"The pious view is that the Vedas are eternal and uncreated and exist essentially as sound. More conventional, but still pious, scholarship may still exaggerate the antiquity of the Vedas, sometimes claiming they go back to 10,000 BC or earlier. Now, however, it looks like even the oldest parts of the Rg Veda do not antedate the arrival of the Arya in India, although the gods and elements of the stories are older, since they are attested with Iranian peoples and the Mitanni, with parallels in Greek and Latin mythology." (Kelly Ross)

Panini's Astadhyayi is the main Sanskrit grammar book. The name Panini came to stand for the unknown author who started the grammar writing process. In a later period, Astadhyayi became even more authoritative through the contributions of Vartikakara Vararuchi (or Katyayana) and Bhasyakara (the commentator) Patanjali. So the complete Astadhyayi is called Trimunivyakarana (contribution of three grammarians). The rules, which have been compiled in Astadhyai, are considered to be essential for Sanskrit language and literature. Besides Astadhyai there are many other famous grammars in Sanskrit.

Panini was born in Shalatula, a town near to Attock on the Indus river in present day Pakistan. The dates given for Panini are pure guesses. Experts give various dates in the 4th, 5th, 6th and 7th century BC and there is also no agreement among historians about his date or to the extent of the work with which he is honored.

Panini was a grammarian trying to refine existing languages (to make a "Sanskrit" language), who gave a comprehensive and scientific theory of phonetics, phonology, and morphology. Sanskrit was the classical literary language of the Indian Hindus and Panini is considered the founder of the language and literature. The word "Sanskrit" means "refined" – it is refined from some raw material language. A treatise called Astadhyayi (or Astaka ) is Panini's major work. It consists of eight chapters, each subdivided into quarter chapters. In this work Panini distinguishes between the language of sacred texts and the usual language of communication. Panini gives formal production rules and definitions to describe Sanskrit grammar. Starting with about 1700 basic elements like nouns, verbs, vowels, consonants he put them into classes. The construction of sentences, compound nouns etc. is explained as ordered rules operating on underlying structures in a manner similar to modern theory. In many ways Panini's constructions are similar to the way that a mathematical function is defined today.

There is no means of knowing the date of Panini. The references to existing authors (there are ten of them) does not give any indication since we don’t know about those authors. that Panini per definition lived at the end of the Vedic period: he notes a few special rules, marked chandasi ("in the hymns") to account for forms in the Vedic scriptures that had fallen out of use in the spoken language of his time, indicating that Vedic Sanskrit was already archaic, but still a comprehensible dialect. An important hint for the dating of Panini is the occurrence of the word yavanānī (in 4.1.49, either "Greek woman", or "Greek script") There would have been no first-hand knowledge of Greeks in Gandhara before the conquests of Alexander the Great in the 330s BC. Aside from the more abstract considerations of long-distance artistic or philosophical influence, the concrete evidence we have for direct contact between Greeks and Indians is largely limited to the period between the third century BCE and first century CE.", ('Hellenistic India' by Rachel R. Mairs, University of Cambridge) He mentions documents which he has referred as Greek (Yavanani). These would place him after the invasion of Alexander the great when India came in direct contact with the Greek. He certainly lived after Buddha because of his referece to Dharma. How long after that is still a problem. In general the any attempt to date Panini is just pure conjecture. He could have lived well after the first century AD. Panini’s dating and the complete grammatical structure is important in the Sanskrit history since Classical Sanskrit is normally dated from Panini.

It is not certain whether Panini used writing for the composition of his work, though it is generally agreed that he did use a form of writing, based on references to words such as "script" and "scribe" in his Ashtadhyayi. No one with any clear understanding of the complexity of his system could conceive that he worked without written notes using human notepads. That is exactly what we are asked to do by those who want to date back Panini. (It is proposed that composed it with the help of a group of students whose memories served him as 'notepads'. Writing first reappears in India (since the Indus script) in the form of the Brāhmī script from ca. the 6th century BC, though these early instances of the Brāhmī script are from Tamil Nadu in southern India, quite distant from Gandhara in northwestern India. Since Gandhara was under Persian rule in the 6th century BC, it would also be possible that he used the Aramaic alphabet (from a variant of which the Brāhmī script is likely a descendant). Along with the understanding that the first sanskrit documentation is only from the second century AD we are forced to date panini in the first or second century AD rather than at the time of Buddha nor Alexander. One of the Aryan deity was still Vasudeva as Panini refers and so it was long before the appearance of the name Krishna which appears only after the third century AD. Kushan kings took their Indian name from Vasudeva until third century AD.

Based on the Archeological, linguistics and geographical reasons, the most probable date of Panini is soon after the first century. The Classical Sanskrit starts from there. At any rate we do not have any Sanskrit documents of work of earlier dates in existence.

While Panini’s date is unknown we have other Grammarians whose dates are well established.
Katantravyakarana by Sharvavarman (100 AD),
Chandravyakarana by Chandragomin (c 700 AD),
Vakyapadiya by Bhartrhari (700 AD),
Katantrasutravrtti by Durgasingha (900 AD),
Siddhahemachandranushasana by Hemachandra (1050-1100 AD), Mugdhavodhavyakarana by Vopadeva (1200-1250 AD),
Jaumaravyakarana by Kramadishvara (1200-1250),
Saupadmavyakarana by Padmanabha Datta (1300-1350),
Harinamamrta by Rupagosvami, (c 1470-1559), and
Siddhantakaumudi by Bhattojidiksita (1700 AD)

Thus in among the known authors the dates starts from 100 AD. Thus we can guess that Panini must have lived sometime in the later half of the first century which was the time when Sanskrit began to appear as a language archealogically.

In a similar manner we can look at the Time Line of Sanskrit Literature which will again give some clue to the beginning of the Sanskrit as a language.

Others

Dandin. (7^th century AD): Kavyadarsa

Somadeva Bhatta. (12^th century AD) :Katha Sarit Sagara (collection of stories)

Again well established writers of Sanskrit all fall after the first century AD which fits the archealogical time frame.

Yet we have the Hindu scholars fooling the public with such statements as the one that follows:

Here are some other extraordinary claims:

   If you look to the history of the languages of the world you will find that they
   went through a number of stages of their development. But the Sanskrit  
   language was absolutely perfect by all means from the very beginning. Is it not
   enough evidence to understand that it is not man-made and it is a Divine gift?

   Because. Its root system of forming a word and its detailed grammar have no
   comparison with any of the languages of the world, and because it is the
   original language, so it is very likely that some of its daily spoken words could
   have been adopted by the other languages which itself is the evidence that
   Sanskrit is the mother language of the world.

   http://www.bhagavad-gita.org/Articles/vyasa.html
   Vedavyasa Reveals the Vedic Chronology of Srimad Bhagavad-Gita

   Showing great compassion for all living entities Lord Krishna’s lila avatar and
   literary incarnation Krishna Dvaipayana Vedavyasa composed the authentic
   historical treatise known throughout creation as the Mahabharata. The eighteen
   chapters of the Bhagavad-Gita are found in the Bhisma-parva, chapters 25 to 42
   of the Mahabharata and they are the exact words that Lord Krishna spoke in
   Sanskrit on the battlefield of Kuruksetra, India over five thousand years ago in
   3137 B.C. The proof that the Mahabharata is definitely an authentic historical
   treatise and not allegorical or mythological is verified in the Srimad
   Bhagavatam, Canto 1, chapter 4, verse 25 

But Bhagvata Purana was written in 6/7th C. AD
Bhagavat gita is written in Sanskrit which came into existence only by 150 AD.  So if Krishna lived in 3137 BC he could not have delivered it in Sanskrit.

    http://www.thevedicfoundation.org/valuable_resources/Sanskrit- 
    The_Mother_of_All_Languages_partIII.htm

    The perfection of the pronunciation (of the consonants and the vowels) and the
     uniqueness of the grammar that stays the same in all the ages from the very
     beginning of human civilization and up till today are such features which prove
     that Sanskrit is not manmade; it is a Divine gift to the people of this world

This will bring us to the subject of the date of the Upanishads. All Hindu Scriptures other than the Rig Veda are written in Sanskrit. Essentially therefore they were written down after the second century AD. The backdating of Sanskrit Upanishads is a common form of deceit and is taken by many historians without asking questions and is repeated as though it is a truth. Here are some examples:

     http://www.usao.edu/~usao-ids3313/ids/html/hinduism.html

     "The Upanishads (basic scriptures of Hinduism proper)--records of teachings
     and discussions of forest hermits, holy men who accomplished the task of
     transforming Vedism into Hinduism during and after the 6th century B.C.E. The
     earliest Upanishads date from 900 to 600 B.C.E., and represent the first
     development of philosophical reflections in Sanskrit literature. According to a
     widespread tradition the oldest Upanishads are the Isa, Kena, Katha, Prasna,
     Mundaka, Mandukya, Taittiriya, Aitareya, Chandogya, Brhadaranyaka,
     Svetasvatara, Kaushitaki, and Maitri Upanishads."

     The Upanishads are ancient texts written in Sanskrit, representing the religious
     and philosophical tradition of Hinduism and India. Together with the Aranyakas 
     the Upanishads are found at the end of the Vedas, the sacred scriptures of
     Hinduism, and thus called Vedantas."

     http://www.answers.com/topic/upanishads
     Upanishads (ūpăn'ĭshădz) , speculative and mystical scriptures of Hinduism,  
     regarded as the wellspring of Hindu religious and speculative thought. The
     Upanishads, which form the last section of the literature of the Veda, were
     composed beginning c.900 B.C. Of the 112 extant Upanishads, about 13 date
     from the Vedic period and the remainder are later, sectarian works.

    http://www.dlshq.org/religions/upanishads.htm

   http://www.sanskrit.nic.in/ABOUTSANSKRIT1.htm

   "As per the Indian tradition Sanskrit Language has no beginning and no ending.
   It is eternal. Self-born God has created it. It is divine. It is everlasting. It was
   first used in Vedas and thereafter it has been the means of expression in other
   fields."

Here is the last straw:

The True History and the Religion of India: A Concise Encyclopedia of ... 
By Swami Prakashanand Saraswati

Thus every literature that we have in Sanskrit must invariably fall after the first century.

We cannot refute the claims that there were literature in India long before that time. But no body can substantiate any existence of Sanskrit literature before 150 AD. This is therefore definitely applicable to all Upanishads wherein we have the new concept of Brahman, Atman and Iswara