Paneer Butter Masala Recipe

Updated on June 7, 2026 by Raks Anand 72 Comments

Paneer Butter Masala or Butter paneer is a rich, creamy North Indian curry with soft paneer cubes in a silky, buttery onion tomato gravy. Aromatic and perfectly balanced with simple pantry spices. Lets see how to get it right the very first time or to perfect the flavor, balanced, silky and rich, with step by step images for beginners and a quick video.

Paneer butter masala is typically served with Indian flatbread like garlic Naan, Kulcha and also with mild pulaos with basmati rice, like peas pulao or jeera rice.

Besides, the choice of accompaniment is yours. Check out my other popular paneer recipes in this website - palak paneer, matar paneer and paneer tikka masala.

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About Paneer Butter Masala
Paneer butter masala Ingredients
Step by step instructions
Top tip
My notes
Substitutions & Variations
Storage
FAQ
Recipe card

Other than eating at restaurant, the recipe was first introduced to me by my friend Sangeeta. Till then I had no clue about the creamy texture that we get in restaurants. So first of all thanks to her for the recipe. She taught me many simple recipes and popular North Indian recipes that I have shared here.

This is the recipe I follow, as I make it weekly for Aj, it is very easy for me these days. I already have posted a microwave version. But I know many of the readers google search specifically. So thought I should post this yummy recipe here.

About Paneer Butter Masala

Paneer butter masala also known as simply butter paneer is a popular Indian recipe. Widely known throughout the world, that is most of the Indian restaurants have this as main side dish in their menu card.

Buttery, creamy as well as rich side dish for flatbread with Indian cottage cheese, Paneer, is such a delight for taste buds. Besides, it is very easy to prepare this at home if you follow the steps.

Since it is widely made in Indian restaurants and households, each have it's own touch. There is no major right or wrong as long as the base remains same.

What makes this recipe work?

The secret to make Best Butter paneer at home comes down to three things:

Onion tomato with cashew makes a smooth base.
Cream and milk makes it rich and silky.
Fresh paneer cubes kept in hot water and added at the end keeps it soft, without getting overcooked and rubbery.
Fewer ingredients, easy cooking techniques.

Paneer butter masala Ingredients

Paneer - Even though fresh homemade paneer is best in the butter masala gravy, you can also use fresh or frozen paneer available in Indian groceries. Though homemade are economical, fresh paneer and frozen from shops are convenient.
Onion - Forms the base for the gravy
Tomato - Use red ripe tomatoes for best color as well as taste.
Ginger, Garlic - I used fresh, whole while sauteeing and then ground it along, but you can use GG paste too.
Cream - Tinned cream, fresh cooking cream or heavy cream works well. I used fresh cooking cream.
Butter - Unsalted butter won't affect the salt measurement in the recipe, for that reason, it is perfect for making butter paneer.
Cashew nuts - Key ingredient for smooth texture and binds the gravy without curdling while adding milk or cream.
Coriander seeds powder - Adds body and aroma
Red chili powder - Use Kashmiri red chilli powder for a vibrant color.
Green chilies - For flavor and heat it lends
Turmeric powder - Gives colour and for it's goodness
Kasuri methi - Dried Fenugreek leaves - Adds aroma typical for such gravies.
Coriander leaves - Fresh cilantro - Added at the end, for a fresh flavor
Whole spices - Cinnamon, Cardamom, Clove

Please refer my Recipe card below for quantities.

Step by step instructions

1. To begin with, heat a pan with little oil, 1 teaspoon butter. After that, add garlic, ginger and green chillies.

2. Then, tip in cubed onion and give it a fry.

3. Add cashews and saute until onion turn translucent.

4. Then, remove in a plate for cooling.

5. Meanwhile, keep paneer cubes in hot water until use.

6. Now, place the cooled items in a blender.

7. After that, add cubed tomatoes (yes, raw!) on top of it.

8. Then, blend to a smooth puree.

9. After that, heat 1 tablespoon oil and temper with Cardamom, cinnamon and cloves.

10. Add the ground onion tomato masala and tip in red chilli powder, coriander powder, turmeric, kasoori methi and saute well.

11. Continue frying the masala for 4-5 minutes in medium heat or until the raw smell goes off.

12. The onion tomato masala should be thick, shiny and ooze oil. Add oil in between if needed.

13. After that, pour milk little at a time in low heat and stir well. Repeat again until you add all the milk to masala.

14. Adjust water (I added ¼ cup) and sprinkle required salt.

15. Once it start to bubble again, add paneer drained from water.

16. Mix well and in goes the cooking cream.

17. Keep the heat in low and don't let the gravy boil vigorously. Just cook in low heat for 2 mins and switch off the stove.

17. Garnish with 3 tablespoon of coriander leaves. Top it with remaining butter.

Serve butter paneer masala hot with soft phulkas or any Indian flat bread best or with pulao.

Top tip

For soft paneer in the gravy, make sure to not over cook, keep the paneer in hot water immersed and add towards the end. Fresh paneer is softest in texture, but you can use frozen ones too. Malai paneer is better in frozen ones.

How to avoid the gravy split (curdle)?

The gravy splits or curdles when there is no binding agent in the base. So use fine cashew paste to avoid this happening.

Also the trick my friend taught me is to slowly add, stir little by little in low flame. Do not add all the cream/ milk in one go.

You can add milk fully to make it gravy without adding any water. This way you get thicker and more creamier gravy.
I have added garlic, ginger and cashews while sautéing.
If you have ginger garlic paste, then you can add while you fry ground onion tomato.
Same applies for cashew . You can saute along ground onion tomato.

My notes

If you like, you can add Indian bay leaf to the tempering. Adds a mild flavor to the curry.

Make sure to grind the onion tomato base to a very smooth puree. Otherwise the curry will not be a creamy sauce.

My friend suggested using whole spices instead of garam masala powder. If you want to make it more aromatic, use half a teaspoon garam masala in this recipe.

This is also called Paneer makhani, Makhan in Hindi means butter.

Substitutions & Variations

Fresh tomatoes - Use Canned tomato puree or Tomato paste. I at times use a dash of tomato paste to the same recipe as the tomatoes are bland here in Singapore.

Cashews - swap with almonds.

Vegan - Avoid ghee, butter and use oil. There are coconut cream and coconut milk available in the market, so you can swap dairy cream or milk with it. Instead of Paneer, use Tofu or a vegetable like potato, cauliflower.

Old version:

Since this paneer butter masala recipe post is updated version, the old version have no much major difference in main ingredients. Only couple of difference:

I used a mirch tadka (Temper 1 teaspoon whole black pepper, one red chilli in butter) and add on top as final touch.
Instead of coriander powder, I use my sambar powder - which is majorly red chilli and coriander with traces of cumin, methi seeds. So totally does justice to the flavor.

Storage

Paneer butter masala keeps good for couple of days in fridge if it is left over.

Freezing - You can divide into portions and freeze paneer butter masala up to 3 months. Defrost and reheat to use it.

Some of my friends also make the base gravy over weekend and use it up in the week days. This need not be frozen but can be kept in the fridge for 5 days. You can also box it eventually.

FAQ

Why my paneer turns rubbery ?

Do not over cook the paneer. Add to the gravy towards end and just bring to a boil after that.

Should we fry paneer before adding to gravy?

I usually do not do this for butter paneer. Prefer the un fried texture than the fried ones. But it is not a mistake to do so. If you want you can go ahead and do it.
I feel frying affects the texture of paneer to more firmer texture. But just follow my rule of soaking in hot water to keep the paneer soft.

Is Butter paneer healthy?

Butter paneer uses cream, butter and for that reason, it is high in calorie. So eating in moderation is the key. So, people who are watching their weight, have diabetes or cholesterol must stay away. A healthy person can eat, but make sure to portion control.

Can we use tomato puree instead of tomato in butter paneer ?

Store bought tomato puree or tomato paste, which is double tart than the fresh tomatoes. So you have to add very less and careful with the amount while adding.

I love how store bought tomato puree adds texture, taste and color that matches restaurant's butter paneer.

How to grind cashews smoothly?

I used cashews while sautéing instead of adding it in ground form. It is usually hard to grind small amount of ground cashew required just for the recipe. So if you want to use cashew paste, I suggest soaking more quantity of cashews and keep it preserved in fridge or frozen, use as needed in the recipes.

To freeze the ground cashew , you can use the ice tray and let it be for 12 hours. Once frozen, you can put the cubes it in ziploc or airtight container. Use one or two cubes according to the quantity of the gravy.

Just add it while sauteeing the onion tomato base masala.

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