In a heavy-bottom sauce pan, fry your paneer on medium heat and make sure to keep turning the pieces so they cook evenly on both sides. Cook until golden brown.
In a separate pan, sauté onions in oil until translucent and then add in the sliced jalapeño.
Add the rest of the sauce ingredients and simmer for 5 minutes.
Once your paneer is done, add it in with your sauce, cover with a lid, and cook until all of the water cooks out.
Keep stirring every few minutes so the sauce doesn’t stick to the bottom.
Notes
If you want to add some extra veggies to your chili paneer, I recommend adding about 1/2 of a small green bell pepper!