For 40K budget, you can always go for the separates. You can purchase a AVR with speaker package with 40-42K.
Just a suggestion. Get Yamaha RX-V371 AVR with Jamo S426 HCS3 Home Theater System.
Yamaha RX-V371 - Rs. 19K - 20K
Jamo S426 HCS3 - Rs. 20-21K
The Yamaha RX-V371 has discrete power of 100W per channel with all the latest features. Its the last year's model but a very good one.
The Jamo S426 HCS3 is a 5 speaker package contains 2 floor standing speakers, 1 center and 2 surround speakers. Its the cheapest but very good quality speaker package at this price. It has been rated twice the price. The bass is enough for a home. If needed you can always add a separate sub-woofer later.
You can take a audition at Reliance Digital at your city and also available at various shops.