Restaurant style paneer butter masala gravy served in a black plate with a spoon.
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4.89 from 63 votes

Paneer Butter Masala

Paneer Butter Masala recipe – is a remarkable creamy dish of paneer cooked in tomato cashew nut gravy, spices and cream. A different and absolutely tasty recipe than other butter paneer recipes out there, so make it now!
Prep Time10 mins
Cook Time30 mins
Course: Maincourse
Cuisine: Indian
Keyword: Butter Paneer, Instant Pot, Paneer Butter Masala, Paneer Recipes
Diet: Gluten Free, Vegetarian
Servings: 4
Calories: 328kcal
Author: Farrukh Aziz


  • 4 tablespoons Butter divided
  • 1 teaspoon Caraway seeds (Shajeera) (You can also use cumin seeds)
  • ½ inch Ginger chopped or grated
  • 3-4 Garlic cloves chopped or crushed
  • 1 Green chili chopped
  • 9-10 Cashew nuts
  • 4 Medium tomatoes ripe and firm, roughly chopped
  • 1 Bay leaf
  • 1 inch Cinnamon stick
  • ¼ teaspoon Turmeric powder
  • 1 teaspoon Coriander powder
  • 1 ½ teaspoon Kashmiri red chili powder (Kashmiri lal mirch powder)
  • 1 teaspoon Kasuri methi dried fenugreek leaves
  • Water as needed
  • Salt to taste
  • 2 tablespoons Cream
  • 200 grams Paneer cut in 1 inch cubes
  • ¾ teaspoon Garam masala powder
  • 1 teaspoon Sugar

To smoke paneer butter masala

  • Live charcoal or lump coal (optional)
  • 1 teaspoon Ghee or Oil


How to make paneer butter masala on stove top

  • In a pan, melt 1 tablespoon of butter. Add caraway seeds (shajeera) and fry for few seconds. Add ginger, garlic and green chili, fry for few seconds.
  • Add cashew nuts and fry for 30 seconds. Then, add tomatoes and sauté on for a minute.
  • Cook until tomatoes are soft. Take it off the heat and cool completely. Grind this tomato cashew masala to a very fine paste.
  • Heat 3 tablespoons of butter in a pan or kadhai. Add bay leaf and cinnamon stick, fry for few seconds.
  • Lower the heat and add turmeric powder, coriander powder and red chili powder. Add kasuri methi and mix.
  • Add ground tomato cashew masala paste, saute on high for a minute. Stir in between. Cook for 2-3 minutes or until masala starts releasing the oil.
  • Add 1/3 cup of water, salt and then bring it to a boil. Do not add too much water at a time.
  • Add cream and mix, cook for 1 -2 minutes only. Add paneer, garam masala powder and sugar. Mix well. Cook for only a minute.
  • Proceed with the step of giving charcoal dhungar for the smoky flavour restaurant or Dhaba like flavour.
  • Dish out, garnish paneer butter masala with some kasuri methi and cream, Serve.

How to make paneer butter masala in Instant Pot

  • Switch on the IP and press sauté mode. After the Instant Pot displays 'hot', melt 2 tablespoons of butter.
  • Then, add caraway seeds (or cumin seeds) and fry for few seconds. Add roughly chopped ginger, garlic and green chilies, sauté for 30 seconds.
  • Add cashew nuts and sauté for another few seconds. Add roughly chopped tomatoes and fry 30 seconds.
  • Then, add bay leaf, cinnamon stick, turmeric powder, coriander powder and red chili powder, mix. Add kasuri methi along with 3-4 tbsp of water.
  • Cancel sauté mode, cover the pot with lid and turn the pressure valve to sealing position. Press 'manual' or 'pressure cook' and cook for 6 minutes on high.
  • Once the cooking cycle is complete, carefully turn the valve to venting to do the quick release. Open the pot and discard bay leaves and cinnamon stick.
  • Blend the masala to a smooth paste using immersion blender.
    (You can also transfer the tomato cashew masala into a blender jar and blend it to a smooth paste. And then transfer the masala back to the pot.)
  • Switch on the sauté on low, add 1/4 cup of water, salt and cream, mix well. Cook for 30 seconds.
  • Add remaining 2 tablespoons of butter, paneer cubes, garam masala powder and sugar. Gently mix and cook for another 30 seconds to 1 minute only.

How to smoke or give charcoal dhungar to paneer butter masala

  • Place a small bowl or a piece of aluminium foil on the gravy. Keep a live charcoal into the bowl.
  • Add a teaspoon of ghee or oil on live charcoal. Immediately cover the pot with lid. Let it rest for 5 minutes so that smoky flavours infuses in the gravy well.
  • After 5 minutes, discard the charcoal. Delicious smoky paneer butter masala is ready to serve.


You can use cumin seeds in case if shajeera (caraway seeds) is not handy to you.
If you have an allergy to cashew nuts or if they are not available with you, swap cashew nuts with blanched and peeled almonds or melon seeds.
Sometimes, I do use almonds instead of cashew nuts to make for butter masala gravy.
I never add onion to the recipe, but only if you wish to, you can add 1 small onion and toss it in butter along with the tomatoes.
Add water to the gravy as per the consistency you like. Do not add too much water at a time.
You can adjust the amount of green chillies and red chilli powder as per your liking. Of course, you can add more to make spicy butter paneer.
Always blend the tomato cashew masala to a fine and smooth paste. This will result in smooth silky buttery gravy.
For instant pot version : Switch off and unplug the IP. Take the pot out and then proceed with giving charcoal smoke to the gravy.


Calories: 328kcal | Carbohydrates: 11g | Protein: 9g | Fat: 29g | Saturated Fat: 17g | Cholesterol: 74mg | Sodium: 162mg | Potassium: 323mg | Fiber: 2g | Sugar: 5g | Vitamin A: 1490IU | Vitamin C: 18.9mg | Calcium: 271mg | Iron: 0.8mg