Paneer Butter Masala is one of India’s most popular paneer sauce recipes. This recipe with Indian cottage cheese cubes in a creamy tomato sauce is the one I have been making for a long time. You can easily make this restaurant style paneer butter masala at home!

About this recipe

This Paneer Butter Masala recipe is a rich and creamy dish of paneer (cottage cheese) in a tomato, butter and cashew sauce (known as Makhani sauce).

The dish has a nice flavor coming from the tomatoes and is slightly sweet with a creamy and velvety feel.

With my easy, quick, and delicious recipe, you can make this restaurant-style paneer butter masala recipe in minutes.

Called by various names such as butter paneer or masala butter paneer or paneer makhani, this dish is one of the most popular Indian dishes. Obviously, being so popular, it is served in many Indian restaurants.

Decades ago (in another life!) I would make butter chicken and this paneer butter masala is adapted from that recipe. During my cooking school days, for the first time, I had learned how to make butter chicken.

I later adapted the same recipe to make paneer butter masala. Many improvisations have taken place over the years.

Ingredients you need

  • Juicy Ripe Red Tomatoes: Tomatoes here are a key ingredient that forms the basis of the sauce or makhani sauce. Makhani sauce is made from scratch with fresh ingredients like tomatoes (especially mashed tomatoes), cashews, and butter. Onions can be added if desired. Although traditionally onions are never added to a makhani sauce. So use ripe, slightly sweet tomatoes. Avoid adding sour or overly tart or unripe tomatoes.
  • Cashews: Cashews are another important ingredient that gives the dish a nice creaminess and shine. The sweetness of the cashews also balances the tangy taste of the tomatoes. Usually in butter chicken or butter paneer, cream is added. To give a creamy consistency and a soft shade, I add both cashew paste and cream.
  • Cream: As mentioned above, apart from the cashews, I also add a little cream which thickens the sauce slightly and makes it rich. Although the addition of cream can be skipped for a less rich version.
  • Butter: The amount of butter added isn’t huge but fair in this paneer butter masala recipe. The butter makes the curry a bit rich and buttery. Although you can go too far by adding a little more butter.
  • Paneer: A quality paneer can make or break your dish. What you want are succulent, sweet paneer cubes delicately coated in a creamy, buttery tomato sauce. So be sure to use a homemade paneer or a good quality paneer. Follow the directions on the package before using the paneer.
  • Spices and Herbs: The list of spices is not much. For that bright orange color, you need to add Kashmiri red chili powder. You can replace it with cayenne pepper or paprika. You will also need garam masala powder. Kasuri methi which are dried fenugreek leaves also add good flavor. Ignore them if you don’t have it. For the garnish, cilantro (cilantro leaves) is added.

Swaps for a vegan version

If you are vegan, don’t worry! You can easily substitute dairy ingredients with vegan alternatives while having a delicious meal.

  • Tofu: To make a vegan recipe, replace the tofu, seitan, tempeh with paneer.
  • Butter or vegan oil: add a neutral tasting oil or vegan butter and skip the cream completely.
  • Coconut Cream: You can even use coconut cream, but with coconut cream, the coconut flavors will be felt in the final dish.

How to Make Paneer Butter Masala

You will need to do some prep work before you start making this delicious recipe. It starts with soaking your cashews, making tomato puree, and mixing in soaked cashews.

Preparation

1. Soak 18-20 cashews in ⅓ cup of hot water for 20-30 minutes.

2. When the cashews are soaking, you can prepare the other ingredients like chop tomatoes, chop and prepare ginger-garlic paste, slice paneer, etc.

3. Crush 1 inch of ginger + 3-4 medium garlic into a paste in a mortar pestle into a semi-fine or fine paste. Set aside. Do not add water when crushing the ginger and garlic.

4. After 20 to 30 minutes, drain the water and add the soaked cashews in a blender or a blender-grinder. Also add 2-3 tablespoons of cool water or as needed.

5. Mix into a smooth paste without any small pieces or chunks of cashews. Remove the cashew paste into a bowl and set aside.

6. In the same blender, add 2 cups diced or coarsely chopped tomatoes. No need to blanch the tomatoes before blending them.

7. Mix with a smooth tomato puree. Put aside. Do not add water when mixing the tomatoes.

Make tomato sauce

8. Heat a heavy-bottomed or heavy saucepan. Keep the flame at a low or medium-low level. Add 2 tablespoons of butter OR 1 tablespoon of oil + 1 or 2 tablespoons of butter in a pan.

Adding oil prevents the butter from browning fastly. You can even add 3-4 tablespoons of butter for a buttery version. Salted or unsalted butter can be added.

9. Keep the flame at a low level. Add 1 tej patta of medium size (Indian bay leaf). Fry for 2 to 3 seconds or until the oil becomes fragrant with the aroma of tej patta.

10. Add the prepared crushed ginger-garlic or 1 teaspoon of ready-made ginger-garlic paste.

11. Fry for a few seconds until the raw flavor of the ginger-garlic is gone.

Also Read: Paneer Pasanda Restaurant Style

12. Pour in the prepared tomato puree. Be careful when adding the mash as it can splash.

13. Mix it very well with the butter.

14. Start cooking the tomato puree over low to medium-low heat. Stir at intervals.

15. The tomato puree mixture begins to simmer.

16. In case the tomato puree splashes too much during cooking, cover the pan partially with a lid or cover completely with a splash-proof lid (channi lid). tomato puree may splash if there is more water in the tomatoes.

17. Stir at intervals.

18. Simmer the mash for 5-6 minutes.

19. Then add 1 teaspoon of Kashmir or Deghi Mirch powder. You can even add ½ teaspoon of Kashmiri red chili powder or ¼ to ½ teaspoon of cayenne pepper or paprika or any variety of red chili powder.

20. Mix well and continue to stir the tomato puree.

21. Sauté until the butter begins to come out of the sides of the pan and all of the tomato puree mixture comes together.

All cooking and sautéing the tomato puree takes about 14 to 17 minutes over low to medium-low heat.

The time will vary depending on the thickness of the pan, the size, the intensity of the flame, etc.

Adding cashew paste

22. Now add the prepared cashew paste.

23. Mix the cashew paste with the cooked tomato puree very well and continue to stir and sauté over low to medium-low heat. Stir constantly after adding the cashew paste.

24. Sauté until the cashew paste is cooked and again the oil will start to leave the sides of the masala. The cashew will start to cook quickly. About 3 to 4 minutes over low heat. So keep stirring nonstop.

25. Then add 1.5 cups of water.

Make paneer butter masala

26. Mix the water very well with the cashew-tomato makhani masala. If there are pieces of tomato-cashew masala, break up with a spoon. You can even use a corded whisk to mix.

27. Simmer the curry and bring to a boil. Stir occasionally.

28. After 2-3 minutes, add the ginger julienne (about 1 inch of ginger – cut into julienne (thin, match-shaped strips). Reserve a few for garnish. The curry will also begin to thicken.

29. After 3 to 4 minutes, add 1 or 2 chopped green peppers.

30. Also add salt to taste and ½ to 1 teaspoon of sugar (optional). You can add ¼ teaspoon sugar to 1 teaspoon or more depending on the acidity of the tomatoes.

Sugar is optional and you can skip it also. If you add cream, you will need to add less sugar.

31. Mix very well and simmer for a minute.

32. Once the sauce has thickened to the desired consistency, add the paneer cubes (200 or 250 grams).

Keep in mind the consistency you want before adding the paneer as you will be cooking the paneer for a few seconds.

You can also fry the paneer, then add the paneer once the sauce has become creamy. I keep the sauce to a medium consistency sauce.

33. Gently stir and mix the paneer cubes into the sauce. You can turn off the heating at this point.

If you find that the paneer cubes are still raw to taste, turn off the heat after adding the cream.

34. Now quickly add 1 teaspoon crushed kasuri methi leaves (dried fenugreek leaves) and 1 teaspoon garam masala to the sauce.

Adding crushed kasuri methi gives it a restaurant flavor. Kasuri methi is optional and can be skipped.

35. Then add 2-3 tablespoons of low fat cream or 1-2 tablespoons of heavy whipping cream.

36. Stir gently but well and turn off the heat.

37. Serve the Paneer Butter Masala hot topped with 1 to 2 tablespoons chopped coriander leaves (cilantro) and the remaining julienned ginger. You can also drizzle with a little cream or sprinkle with butter during the service.