Creamy Restaurant style Paneer Butter Masala is easy to make at home. This creamy curry is made with onion, tomatoes, cashews, cream and butter (of course!). t has a mild sweet taste and pairs beautifully with garlic naan or jeera rice.

You can never have enough of paneer. Can you?

There are just so many ways to cook with it. You cook it with green peas you get matar paneer, you cook with spinach you get palak paneer.

And you cook it with butter and cream, you get Paneer Butter Masala.

Each of them is delicious but my favorite is this paneer butter masala. You can say I have a thing for creamy sauces and that’s why this version has my heart.

Sometimes, it is also known as Paneer Makhani. It’s one or the same thing.

Of course, few ingredients might be different here and there but both do have a creamy sauce and so I like to club them together under the same recipe.

This Paneer Butter Masala

✓ tastes exactly like the one at your favorite restaurant

✓ has a creamy tomato-based sauce

✓ has a rich curry made with butter, cashews and cream

✓ pairs well with naan or rice

To make this paneer butter masala recipe, we start with boiling the tomatoes, onion, cashews, ginger and garlic.

This forms the base sauce. Once the ingredients are boiled, they are pureed and then rest of the ingredients (including paneer) are added to the dish.

A lot of people use only tomatoes for making paneer butter masala or paneer makhani. You can do the same if you like.

I like adding some white/sweet onions to my curry for the extra flavor but it will taste just as good with the tomatoes too.

Remember to not use red onions here. A lot of times they have a very strong flavor and that will affect the final taste of the dish.

So, stick to the white or sweet onions for this dish.

Ingredients

Paneer: you can buy paneer from any Indian grocery store, it’s usually in the cold section along with yogurt, milk etc. You can also make paneer at home, which tastes much better than any store bought paneer.

Onion-tomatoes: the base of the curry is made with onions, tomatoes, ginger-garlic. I like using white onion for this recipe for its subtle and sweet flavor. Using tomato paste is optional but it enhances the tomato flavor further.

Cashews: to thicken the gravy and make it creamier, we use cashew in this recipe. For this paneer butter masala recipe, we need raw, unsalted cashews. If you don’t have cashews you can also use almonds but blanch them before using.

Spices: whole spices like cinnamon, bay leaf, cloves and ground spices like garam masala, Kashmiri red chili powder, cardamom are used in this recipe for flavor and aroma.

Butter and cream: since this is a creamy curry, butter and cream are added to make it thick and rich. They also help in balancing the flavors and giving the dish that sweet touch.

Tips to Make the Best Paneer Butter Masala

Okay, I have heard this so many times – that my paneer butter masala doesn’t taste like the one at restaurants.

Here’s what you need to do to make it absolutely perfect!

Use nuts in the gravy: yes, it makes the sauce thick and creamy and so you need to use nuts in the recipe.

Cashews and almonds both work, you can even use a combination of both.

However, do not use a lot of nuts because then the final curry will be super thick and I wouldn’t recommend that.

I suggest using 10-15 cashews for 250 grams of paneer.

Be generous with cream and butter: I am not asking you to use 1 cup of both but don’t use ½ teaspoon either!

This is an indulgent dish and so you need to little generous with fat if you are looking for that restaurant style taste.

Use minimal spices: this recipe doesn’t need a lot of spices. A bit of garam masala and cardamom powder is plenty.

I also add little chili powder and Kashmiri red chili powder (mainly for the color).

The flavors of this dish come from fresh tomatoes, cashews, ginger, garlic, butter and cream!

Homemade paneer makes its even better: I know it’s not always possible but if you can, use homemade paneer.

It really makes so much difference. Here for this recipe, I have used store bought paneer but I often make it with homemade paneer and you can tell that it’s way better.

Add sugar to balance the flavors and for that subtle sweet taste: paneer butter masala should have a little sweet taste to it and you get that from adding cream and sugar.

I don’t use a lot of sugar, only 1 teaspoon but that helps in balancing the flavors.

TIP: If using store bought paneer, soak it in hot water for 20 minutes before using in the recipe.

It makes a lot of difference. Also remember to not over cook your paneer else it will become rubbery and chewy.

Hope you guys enjoy this recipe of paneer butter masala or paneer makhani, whatever you may call it.

Method

1- Heat 1 teaspoon of oil in a pan on medium heat. Once the oil is hot, add the bay leaf, cinnamon stick, cloves and saute for few seconds.

Then add the the onion, garlic, ginger and saute for 2 to 3 minutes until the onion is translucent.

2- Add the tomatoes and cashews and mix.

3- Then add 1 cup of water.

4- Cover the pan and cook on medium heat for 15 minutes.

5- After 15 minutes, remove the pan from heat. Remove the bay leaf, cinnamon stick and cloves.

6- Let the mixture cool down a bit and then transfer to a blender. It’s important to let it cool down a bit else it will all blow up from the mixer.

7- Grind the masala to a smooth paste and set aside.

8- To the same pan now add 2 tablespoons butter along with remaining 1 teaspoon oil on medium heat.

9- Once the butter melts, add the red chili powder and the Kashmiri red chili powder and fry for few seconds. This will give the curry a nice red color.

10- Then add the ground paste back into the pan along with the garam masala (start with 1/2 teaspoon and add the remaining 1/4 teaspoon at the end only if you feel like the curry needs that extra bit of garam masala), cardamom powder, sugar, salt and tomato paste (if using).

Mix well and cook for 1-2 minutes.

11- Then add the cream and mix.

12- Add in the paneer and cook for 2 to 3 minutes on medium heat. Finally add crushed kasuri methi.

Garnish paneer butter masala with cilantro and serve hot with naan or rice!

Notes

• The curry thickens considerably as it cools down. While reheating, you would need to add some water to thin it out.
• If you don’t have cream or are out of cream, you can either skip the cream or add some coconut milk for that richness. You can also reserve some of the cashews and blend it with milk and add that to the curry later on.
• Use a good quality Kashmiri red chili powder to get that nice color of the gravy. Frying the red chili powder in butter for few seconds is important for that bright color of paneer butter masala.
• This recipe can be easily doubled, you would just need to double all the ingredients in the recipe.

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This post has been updated from the recipe archives, first published in 2013.