To describe action in a picture, you use the present continuous. Basically, you describe the picture as a present event, even if the picture is hundreds or thousands of years old.

Hey Arwa, You could use either one really. It depends on your choice and the instructions given to you. If you are telling a story, you will most likely use the present continuous ("I see a puppy and he is playing with his toys..."). If you are making up a story about a picture, you could use whatever you want and include the past and future. ("I see a puppy, he is playing with his toys. He just came from the park, where he played with other puppies and will soon go to sleep...") :)