Vinay,

If you intend to market this device, you should be aware of the fact that in most countries any device that is to be connected to the public telephone network is required by law to comply with the appropriate standards!
This is not only to prevent possible malfunctioning of the network, but also to ensure the safety of the user.
Even if you're only building a "one off" you should take care when connecting anything to the public network. Especially when, like you say, this is a PC.

To stay on the safe side and to spare yourself a lot of trouble, use a standard DAA, which takes care of proper impedances and isolation for you. Zarlink (formerly Mitel) has some great products. I personaly have used their MT88437, which can be programmed with a couple of resistors to comply with almost every standard. Moreover, the output rides on a DC level of 2V, which is convenient for use with a single supply ADC.

Best regards,
Rob Klein.