Paneer Butter Masala Recipe

Paneer butter masala recipe – Learn to make the best restaurant style paneer butter masala at home. Isn’t it fun to recreate restaurant style dishes at home? Years ago, I found this best paneer butter masala recipe in one of the cookbooks in a library. I tried it, tweaked it, then made this for years & my entire family got hooked to it. It’s creamy, flavorful & tastes super delicious!! It goes so well with butter naan, roti, plain basmati rice or jeera rice.

I love simple recipes and easy cooking that calls fewer ingredients and fewer steps to follow. This restaurant style paneer butter masala recipe is always a winner for its simplicity & amazing taste. So what is it?

About Paneer Butter Masala

Paneer butter masala, also known as butter paneer is a rich & creamy curry made with paneer, spices, onions, tomatoes, cashews and butter. As the name denotes, the curry is cooked in butter which imparts it’s characteristic buttery flavor to the dish.

It is one of the most popular dishes in Indian restaurants similar to kadai paneer, palak paneer, matar paneer and malai kofta.

This paneer butter masala is a curry lover’s dream!! Soft paneer dunked in a creamy, silky, super flavourful and delicious curry. My easy recipe will help you make the best butter paneer that tastes better than anything from a restaurant. Make this once and I am sure you will never order it in a restaurant.

This is my go-to butter masala recipe. I published it on my blog 6 years ago & after making it countless times, I decided to update my post with more tips, substitutes & instant pot instructions which I have tried.  

This recipe uses only pantry staples and does not need any fancy ingredients except for cream. I have also mentioned the substitutes for some ingredients.

To make paneer butter masala, firstly onions, tomatoes & cashews are sauteed with spices. Then these are blended to a silky smooth puree which forms the curry base. This is further simmered with butter & spices to make the butter masala.

Lastly cubed paneer is added to it along with the cream which makes it creamy & amazingly delicious. Truly, a restaurant kind of paneer dish is ready in just 30 to 40 minutes!

How to make paneer butter masala (stepwise pics)

Prepare the gravy

1. If using store bought paneer, pour 2 cups of hot water to a bowl. Add paneer cubes & rest for about 15 to 20 mins. Later drain the water and set aside. This will soften the paneer. I use this homemade paneer, so I skip this step.

2. Pour 1 tablespoon oil to a hot pan. Add 2 green cardamoms & 1 cup cubed onions. Saute them on a medium flame till they turn transparent or lightly pink in color. This takes just 4 minutes.

3. Next add the following:

• 1½ cups finely chopped tomatoes
• ¾ teaspoon salt. Again saute for 2 to 3 minutes. Then cover the pan and cook till mushy.

4. When the tomatoes and onions are completely soft cooked & mushy, add the following:

• ¾ to 1 teaspoon red chili powder (low heat variety)
• ¾ to 1 teaspoon garam masala
• 1 teaspoon coriander powder (optional)
• 12 to 14 cashews
• ¾ teaspoon sugar (optional, to balance the flavors)

5. Saute this onion tomato masala on a low heat for 2 to 3 minutes. It should begin to smell good and aromatic. Turn off the stove.

6. Cool this completely and add to a blender. Pour 1 cup water. Blend this mixture to a super smooth puree.
Tip: To speed up the process, I pour ice cold water to the blender jar first and then transfer the warm mixture.

7. Blend to a very smooth & silky puree. If your blender is not powerful enough to make a fine puree, then strain it through a fine strainer to a bowl.

Make paneer butter masala

8. Heat a pan on a low flame with 1½ tbsp butter. When the butter melts, add all of the following spices. You can skip them if you don’t have.

• 2 green cardamoms
• 1 bay leaf
• ½ inch cinnamon
• 3 cloves

9. When the spices begin to sizzle, add 1½ teaspoon ginger garlic paste. Saute for 1 minute or until you begin to smell it good. The raw smell should go away. Take care to cook this on a low to medium heat. Do not burn the paste.

10. Next pour onion tomato puree. I also added ¼ teaspoon red chili powder for deeper color. This is completely optional. Ensure the stove flame is at low otherwise the curry begins to splatter.

11. Immediately pour ½ cup water & mix well to bring it to a gravy consistency. If it is too thick you can add little more water.

12. Cover and cook on a medium flame until the gravy turns thick & flavorful.

13. When the paneer butter masala gravy is ready, you will see traces of fats over the gravy. This is the color you may get. Open the lid and cook until the gravy turns thicker. Taste test and add more salt if needed

14. Make sure the gravy reaches the desired consistency then add 200 to 250 grams paneer. Take 1 teaspoon kasuri methi in your palm and crush it between both your palms. Then add it to the butter masala. Avoid adding paneer when the gravy is still runny.

15. Stir well. On a low flame cook covered just for 1 to 3 minutes. Cooking for longer can make the paneer harder. Add 2 to 3 tablespoons cream and stir. You should get this thick creamy texture as you see in the picture below.

Transfer paneer butter masala to a serving bowl. Garnish with 1 tablespoon cream & 1 tablespoon finely chopped coriander leaves. Serve paneer butter masala with Jeera rice, chapathi, Paratha, roti, butter naan or even with plain basmati rice.

Serving suggestions

Paneer butter masala is so much flavorful by itself so it can be served with just plain basmati rice. Any other kind of non-mushy and grainy rice also goes well. Some onion and cucumber slices on the side with lemon wedges will be great.

However if you choose to have something better than plain rice you can simply make jeera rice or ghee rice.

During their visits to restaurants, most Indians love to eat their paneer butter masala with butter naan, tandoori roti or plain kulcha with sliced onions, carrots, cucumbers and lemon. At home, we simply eat it with plain soft roti or jeera rice.

Pro Tips

Silky smooth gravy is what makes this dish classic. So blend the cooked onion tomato mixture to a very smooth puree. If you do not have a powerful blender then pass the puree through a strainer.

Frying paneer: Usually paneer is added raw while making paneer butter masala. But you can also fry it first and then add it to the gravy. But if you are frying it inappropriately, then it will turn hard and chewy. Fry them on a medium heat in little oil until golden and drop them to a bowl of water. Paneer with absorb the water and remain soft. Without this step, simply frying it makes it hard.

Cream: Avoid cooking paneer butter masala after adding cream. If your cream has no added stabilizers, it is most likely to split if you cook the curry after adding cream.

Ingredients and substitutes

Cashews impart a mild sweet & milky flavor to the butter masala. They also stabilize and thicken the gravy. So do not skip them. However you can substitute them with almonds. Soak them in hot water for an hour, peel off the skin and use them here. Substitute nuts with seeds of your choice. More info on this in the common questions section below.

Paneer: If using store bought, ensure you choose one that do not have any additives like starch. Usually store bought paneer with added starch becomes rubbery the minute it hits the hot curry. It is a good idea to refresh your store bought paneer by soaking in hot water for 15 to 20 mins. This step prevents rubbery paneer.

Paneer can be substituted in this recipe with tofu, quorn, boiled eggs or grilled mixed vegetables.

Onions are the key ingredient in this recipe and is used to naturally sweeten the gravy. They also help to balance the tang from the tomatoes. If you prefer to skip onions, then balance the tang by adding more cashews or cream.

Ripe tomatoes not only enhance the color of the paneer butter masala but also add a slight tang to the curry. Always use red ripe tomatoes. Avoid them if they are even slightly unripe as they alter the flavor of the dish.

Butter is another important ingredient. If possible use unsalted butter. I feel the salted one is not as fresh as the unsalted one. Use fresh and nice smelling butter. If you don’t eat butter, then you may use oil or ghee. But your paneer butter masala will lack the real flavor of butter.

Cream: On different occasions, I have made this recipe with fresh cream, whipping cream, heavy cream, cooking cream & sterilized cream. All of these are dairy creams & work well. If using cooking cream, use 3 tbsps more than mentioned in the recipe. If using sterilized cream, whisk the cream in the container with a fork until smooth and uniform. Then pour it.

Spices for paneer butter masala

Garam masala is the key ingredient to flavor up any Indian curry. Not all garam masala are same. Unfortunately most store bought garam masala are low in flavor. Since they oxidize, their natural flavors diminish. So please use a good one. Also adjust the quantity to suit your taste. I use this homemade garam masala.

Kashmiri red chilli powder imparts that deep color to the dish without making it extremely spicy or hot. Avoid using hotter kind. Use any other similar variety that is low in heat like byadgi chilli powder or paprika.

Whole spices can be skipped except for 2 cardamoms added with onions. If you don’t have the cardamoms, then simply substitute the whole cardamom pods with ¼ to 1/3 teaspoon ground cardamom. Add it along with garam masala and not while frying the onions.

Kasuri methi are dried fenugreek leaves and they impart a great unique aroma to the dish. If you do not find them just skip as there is no substitute to this. But you will miss the flavors of kasuri methi. You can find this easily in any Indian store or amazon.

How to make one pot dish?

Make the entire dish in a steel pot. To make it this way, soak the cashews in hot water for 30 mins. Skip all the whole spices in the recipe. To compensate for the flavors, add more garam masala if you wish.

To start with, saute the ginger garlic in butter and oil. Then add the onions. Follow the recipe as is till you saute the onion tomato masala. Take the pan off the heat & pour water as mentioned in the recipe card.

Using an immersion blender, blend the ingredients to a smooth puree. Then put back the pan on the stove and simmer until the gravy thickens and you see traces of fats over the gravy.

It takes about 10 to 12 mins from the time the curry comes to a rolling boil. But simmer the curry & do not cook on high heat as it will splash out of the pot.

Instant pot butter paneer

To the instant pot steel insert, add 1 cup cubed onions, 1 ½ cups chopped tomatoes, 14 cashews, ¾ inch ginger, 3 cloves of garlic and 2 green cardamoms. Pour 1 cup water.

Secure the Instant pot with the lid and position the steam valve to sealing. Press pressure cook button and set the timer for 6 mins.

When the pressure releases, open the lid and remove the rice bowl.

Using an immersion blender, blend this to a smooth puree. If you don’t have an immersion blender, strain the stock/water and set aside. Cool the onion mixture and add to a blender. Make a fine puree adding some strained stock/water as needed.

Add 2 tablespoons butter to the instant pot. Press saute button (low). When the butter melts, add ¾ to 1 teaspoon red chilli powder, ¾ to 1 teaspoon garam masala, 1 teaspoon coriander powder, ¾ teaspoon salt and 1 teaspoon sugar.

Quickly pour the left over strained water and the onion tomato mixture. If you do not own a powerful blender then simply pass the mixture through a sieve/filter.

Mix everything and add more water if needed to bring it to a gravy consistency. I add another half cup water.

Let it simmer for about 7 to 8 minutes on saute (low). This is a very important step for a flavorful paneer butter masala. In between keep stirring to prevent burning. Switch between off & saute if the pot becomes too hot & the mixture sticks to the steel insert.

When the gravy is cooked, you will see traces of butter over the curry. Taste test and add salt, sugar or more garam masala if needed.

Ensure the gravy is thick and smooth. Then turn off the Instant pot. Add paneer, crushed kasuri methi and cream. Give a good stir and carefully remove the steel insert from the instant pot. Be careful as it will be hot.

Cover the pot with a plate and let it rest for 5 to 10 mins. Garnish paneer butter masala with cream and coriander leaves.

Instant pot tips for butter paneer

For best results, I use a blender to puree my onion tomato masala and pass it through a strainer. My immersion blender does not give the same silky smooth texture to the paneer butter masala gravy.

You can also simply cook all the ingredients in a bowl (PIP) in the Instant pot. Cool them and blend. Make the curry on the stovetop.

You can also cook your basmati rice in the instant pot when you pressure cook the onion tomato masala. For that add 2 cups basmati rice to a bowl and pour 2 ½ cups water (serves 4). Place a trivet in your instant pot and keep the rice bowl over that.

Sometimes I also add 1 tbsp ghee, some roasted cumin and other whole spices to the basmati rice to make jeera rice. You can check the quantity of spices on this jeera rice post.

Faqs

Common questions

How to make paneer butter masala ahead?

Make the gravy or curry base without cream. Cool it completely. Refrigerate or freeze it in glass containers. Reheat it until bubbling hot, then add paneer. Cook for 2 mins and add cream.

How to make this recipe vegan?

This recipe can be made vegan easily by substituting paneer with extra firm tofu or any grilled veggies. Use vegan butter & vegan cream for butter and cream substitutes.

Can I use this recipe to make butter chicken?

You can use the sauce for butter chicken, but the spice levels I use for meat recipes is higher. I do have separate recipes, you can these butter chicken and chicken butter masala.

Why are nuts & seeds used in paneer curry?

There are a lot of paneer curries where apart from cashews even almonds, magaz seeds (melon seeds) and poppy seeds are used. All of these serve the same purpose. They not only impart a creamy texture to the curry but also tones down the heat by adding a milky aroma to the dish.

Apart from this nuts & seeds also work as a stabilizer there by not splitting or curdling the curry in which tomatoes and dairy are used.

What is the best substitute for nuts & how to use?

There are a lot of people who cannot eat nuts due to allergies. For them a good substitute is poppy seeds, hulled white sesame seeds and sunflower seeds. I have tried with the first 2 options but a few readers have made this sunflower seeds too.

Soak these in warm water for 3 to 4 hours and then discard the water. Blend them with fresh water in a nut grinder or a chutney grinder until very smooth. Pass it through a sieve along with onion tomato puree.

Are paneer butter masala & paneer makhani same?

No, Just like Chicken butter masala and Chicken makhani (Butter chicken) are different & not the same, even paneer butter masala and paneer makhani are different.

Though both are cooked in butter with similar ingredients they are not the same. But many restaurants use the terms interchangeably.

Paneer butter masala is a restaurant derived dish and there is no one particular way it is made across India. Each restaurant follows their own method & a set of ingredients.

Example – onions, poppy seeds, melon seeds, cream etc. That’s why no 2 restaurants serve the same tasting paneer butter masala.

Paneer makhani on the other hand is a dish made with specific ingredients tomatoes, cashews and cream. It does not make use of ingredients like onions, poppy seeds or melon seeds. You can check the recipe of Paneer makhani here.

More Paneer recipes
Paneer tikka masala
Paneer lababdar
kadai paneer
Shahi paneer

Related Recipes

Recipe card

This recipe was first published in November 2014. Updated & republished in December 2020 with lots of tips, substitutes & instant pot instructions.