How to group uploaded documents into folders? I want to group my documents in sub folders... when i upload the document using core upload module, i want that those modules get categorised under different section and a user can see those and when he selects an optio then all the files under that folder gets displayed.

i am using drupal on shared web hosting.
In Drupal, this is probably easier to create a custom content type Document, to which you add a file field.  You can then add a taxonomy term reference field targeting the included Tags vocabulary (in Drupal 7) and then tag the files however you like.  Then, you can create views using the Views module to display the files however you like.  This approach offers a lot of flexibility but will be very complicated to set up your first time.

Alternately, if you have a simple structure, you could create a custom content type Group of documents and attach a file field that allows for unlimited uploads.  Then, you could create a node of the Group of documents content type for each page and upload the files that way.

I didn't describe a way to organize the documents into folders because Drupal doesn't really care about folder structure.  If you really wanted to have a folder structure, it would be better to just upload them via SFTP and let users browse the directories without interfacing with Drupal at all.