This Butter Paneer recipe (aka paneer butter masala) is ultra-rich, creamy, and straight out of the restaurant playbook. It’s made with cashews, cream, butter, and plenty of bold Indian spices — perfect for scooping up with soft naan or spooning over fluffy basmati rice.
Looking for something lighter? Try my Paneer Makhani with Coconut Milk for a dairy-light, cashew-free twist. Or if you need a fully plant-based option, check out my Tofu Tikka Masala — it’s vegan, protein-packed, and just as satisfying. And if you’re craving more Indian Food, my Aloo Tikki Burger and Dal Maharani recipes are a must try!
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The Difference Between Paneer Tikka Masala and Paneer Butter Masala
Paneer tikka masala comes from North India’s tandoori and Mughlai cooking traditions. The paneer is marinated, often grilled or pan-seared, and then simmered in a spicier, tangier gravy. It reflects the smoky, high-heat cooking style of tandoors and has stronger aromatics and deeper spice.
Paneer butter masala, by contrast, comes from Delhi’s post-partition Punjabi restaurant culture and evolved alongside butter chicken. It uses a makhani-style gravy—creamy, buttery, mildly spiced, and more tomato-forward. The paneer isn’t grilled, and the sauce is richer and smoother.
In short: tikka masala is smokier and spicier, butter masala is creamier and milder, and their differences come from distinct cooking traditions and regional influences.
Key Ingredients and Why They Matter
Paneer: The star of the show. Paneer holds its shape beautifully, absorbs flavor without falling apart, and gives this dish its soft, chewy bites that contrast the creamy sauce. Fresh paneer works best, but store-bought is great once simmered.
Onions + Garlic + Ginger: The aromatic foundation. These create depth, sweetness, and warmth. Chopping them finely ensures a perfectly smooth sauce later.
Spices: These are the soul of paneer makhani. Kashmiri chili powder gives bright color without extreme heat. Fenugreek leaves add that signature restaurant-style flavor — the slightly smoky, buttery aroma you associate with makhani gravies.
Cashews: The secret to a naturally creamy, ultra-silky sauce. Once simmered and blended, they make the gravy luscious without needing too much cream.
Pureed Tomatoes: Using canned tomato purée gives consistent flavor, the right amount of acidity, and a naturally thick texture. Fresh tomatoes often need longer cooking.
Butter + Cream: These make the gravy rich, velvety, and “restaurant-y.” Coconut cream + vegan butter work beautifully for a vegan version.
How to Make Paneer Butter Masala
- Sauté onions in butter until translucent.
- Add garlic, ginger, and spices; cook until aromatic.
- Add tomatoes, salt, and cashews; simmer.
- Add water, simmer again, and cook covered 25–30 minutes.
- Cool completely, then blend and strain.
- Stir in cream, paneer, sugar, and a little water.
- Simmer 10 minutes until the paneer is soft and the sauce is silky.
Top 5 Tips for The Perfect Butter Paneer
1. Don’t rush the simmer: The cashews need time to soften and blend fully. Under-cooking leads to a grainy sauce.
2. Toast spices gently: Spices burn fast. If they scorch, the whole sauce becomes bitter. Lower heat is your friend.
3. Always strain the gravy: This is what separates homemade curry from restaurant-style makhani.
4. Use fresh or good-quality paneer: Rubberiness usually comes from cheap or old paneer. Simmering gently fixes this.
5. Don’t skip the fenugreek leaves: They add the signature makhani aroma that you cannot replicate with anything else.
FAQ
It’s important to use canned coconut milk (preferably full fat) to add the right thick creaminess to this dish. The coconut cream that I mentioned earlier will be the perfect vegan substitute for regular cream; and, paneer can be substituted with baked tofu. I usually bake my tofu at 350 degrees for 30 minutes when I use it in a dish like this. Just chop the tofu into cubes and spread apart on parchment paper before placing into the oven.
If you don’t have an immersion blender, feel free to use a regular blender for your paneer butter masala instead. However, make sure the mixture has completely cooled down before popping it into your blender!
Paneer is a common ingredient in Indian dishes like this paneer butter masala; it is essentially a firm cottage cheese that doesn’t melt upon heating like other cheeses. The texture resides somewhere between a block of firm cheese and tofu, and is similar to halloumi. You can purchase paneer at the store or make my 2-ingredient homemade paneer instead!
Butter Paneer Masala (Restaurant Style!)
Ingredients
- 3 tbsp Butter, (I used vegan earth balance butter)
- 1 c Onions, finely chopped
- 1 tbsp Ginger, crushed
- 1 tbsp Garlic, finely chopped
- 1 tsp Garam Masala
- 1.5 tsp Kashmiri Red Chili Powder
- 1 1/4 tsp Cumin Powder
- 1/4 tsp Turmeric
- 1 tsp Fenugreek Leaves
- Salt, (To taste)
- 1 c Pureed Canned Tomatoes
- 25 Cashews
- 1/2 c Cream
- 300 grams Paneer
- 1 tsp Sugar
- 1 c Water
Instructions
- Sauté the aromatics: Heat butter in a pan and cook the finely chopped onions over medium heat until translucent. Add the ginger and garlic and cook for another minute.
- Bloom the spices: Add garam masala, Kashmiri chili powder, cumin, fenugreek leaves, and turmeric. Lower the heat slightly and cook until fragrant, being careful not to burn the spices.
- Add tomatoes and cashews: Stir in the canned tomato purée, salt, and cashews. Let the mixture simmer for 5–7 minutes to soften the nuts and deepen the flavor.
- Simmer with water: Add one cup of water, bring to a gentle simmer, cover with a lid, and cook for 25–30 minutes. Stir every few minutes to prevent sticking.
- Cool and blend: Let the mixture cool completely before blending. Use an immersion blender or a traditional blender. Do not blend while hot.
- Strain the sauce: Push the blended sauce through a sieve to remove cashew pulp and achieve the restaurant-style silky texture.
- Finish the curry: Return the strained sauce to the pot and add cream, paneer cubes, sugar, and extra water if needed to adjust consistency.
- Final simmer: Cook for another 10 minutes until the paneer is soft and the gravy is thick, creamy, and glossy. Garnish with cream and cilantro.
Video
Notes
Nutrition
Nutrition information is automatically calculated, so should only be used as an approximation.
Serving Suggestions
Paneer makhani is rich, creamy, and comforting enough to be the main character, but pairing it well makes the whole meal feel complete. Serve it with soft Butter Naan, warm Jeera Rice, or fluffy Basmati Rice to soak up all that silky gravy. The combination turns your kitchen into your favorite Indian restaurant.
For a fuller spread, pair it with a bright, crunchy side like Cucumber Raita to balance the richness. It also works beautifully with dishes like Bhindi Masala, Paneer Manchurian, or Aloo Tikki Chaat if you want a full Indian dinner night.
If you’re hosting, this dish makes an amazing centerpiece because it reheats well and looks luxurious on the table. Finish the meal with something cooling and sweet like Lychee Dessert Cups or Rose Chai Latte for the perfect end to a cozy, comfort-food feast.
This is THE DISH! I started making this butter paneer ever since I saw it on shreya’s tiktok in 2021… I’ve tried many paneer recipes but this one has never failed me. It is easy, delicious and quick! Genuinely so close to restaurant quality and have gotten endless compliments from friends and family! Highly recommend !!
My friends licked their plates when I made this for them❤️
This is my favorite paneer recipe! Tastes just like from the restaurant
Tasted amazing! I couldn’t find Fenugreek leaves so I substituted it with a bit of curry powder mixed with sugar and it worked wonders. Easy dish that you can make any time of year, but especially good for those chilly nights!
This was really good and easy to make! I could not find Kashmiri Red Chili Powder in our Asian supermarket so I substituted it with Cayenne Pepper and it turned out amazing as well. Thanks for this recipe! Greetings from Germany 🙂
As a person who can’t cook, this was ridiculously easy and ridiculously tasty!
Super easy to follow recipe, and the results were delicious especially for a novice chef like me! Hardest part was just getting all the ingredients 😂 Would definitely make this recipe again 💯
This was so good! It was really easy to make and it came out so velvety smooth with such good flavors. I will definitely be making this again & im so glad I found this recipe!