Impossible to say since we don't know how you plan to use that server. It might be everything from a full-blown domain controller w/ SQL Server database, application servers, Outlook/Exchange servers, runing backups, etc., or maybe nothing more than a Gateway. It's like asking "I have 5 ppl in my household, what vehicle should I buy"? I don't know, tell what you plan to do, maybe you need a 4-door sedan, maybe you need a Hummer.
IOW, different usage will dictate where you need to spend your resources, esp. when you have a tight budget. CPU (quad core, dual core)? Memory (how much, how fast)? Hard drive space (fast and small, or slow an high capacity)? RAID controllers?
I need to run tally on the server. it will serve licenses to seven computers and hold the data file too that will be accessed simultaneuosly by seven users. then i will run simple back up software and a simple email server software. It will also act as the internet gateway. The network setting will shift from workgroup to domain setting.