Dhaba-Style Paneer Butter Masala Recipe

Rich, creamy, and utterly indulgent, this dhaba-style paneer butter masala brings the magic of Indian highway eateries straight to your kitchen. I still remember stopping at a roadside dhaba in Punjab during a family trip, watching the cook toss paneer cubes in that glossy, orange-red gravy, the aroma of butter and spices filling the air. This recipe captures that same rustic charm with restaurant-quality results, perfect for weekend dinners or when you want to impress guests without spending hours in the kitchen.

What is Paneer Butter Masala?

Paneer butter masala is a beloved North Indian curry featuring soft paneer cubes swimming in a silky tomato-based gravy enriched with butter and cream. The dish balances tangy tomatoes with sweet cream, aromatic spices, and a generous amount of butter that gives it its signature glossy finish.

A staple at Indian restaurants and highway dhabas across North India, this vegetarian curry is comfort food at its finest. It pairs beautifully with naan, roti, or jeera rice and works equally well for weeknight family meals or special occasions.

About My Authentic Recipe

This recipe comes from years of perfecting the dhaba technique, the kind served at roadside eateries where truckers and travelers stop for soul-satisfying meals. Unlike restaurant versions that often use cashew paste and heavy cream, dhaba-style paneer butter masala relies on a charred tomato-onion base and the bhuna technique, where spices are roasted until oil separates.

The secret lies in slow-cooking the base gravy until it develops deep caramelised flavours, then finishing with butter and a touch of cream. I char the tomatoes directly on flame before blending, which adds a subtle smoky depth that you cannot achieve otherwise. The result is a curry with complex layers, bold color, and that iconic dhaba taste.

Why You’ll Love This Recipe

This paneer butter masala delivers restaurant flavor without complicated techniques or hard-to-find ingredients. The gravy comes together in under 40 minutes, and the recipe is forgiving enough for beginners yet authentic enough to satisfy seasoned home cooks. It is naturally vegetarian, protein-rich from the paneer, and can easily be made vegan with simple swaps. The dish reheats beautifully, actually tastes better the next day, and freezes well for meal prep.

Ingredients & Substitutes

This recipe uses everyday pantry staples along with fresh tomatoes and paneer. For the paneer, use fresh homemade or store-bought blocks cut into cubes. You can substitute with extra-firm tofu for a vegan version, but paneer gives the authentic texture and flavor.

Kashmiri red chili powder provides the signature red color without excessive heat. If unavailable, use half the amount of regular chilli powder mixed with a pinch of paprika. For the cream, use fresh dairy cream or cashew cream for a vegan option. Kasuri methi (dried fenugreek leaves) adds an earthy, slightly bitter note that balances the richness. Skip it if you cannot find it, but the flavor will be less complex.

Butter is non-negotiable for authentic dhaba taste, though you can reduce the quantity slightly if needed. The recipe calls for whole spices like bay leaves, cinnamon, and cardamom for the base, and garam masala for finishing warmth.

Variations

Vegan Paneer Butter Masala – Replace paneer with firm tofu, use vegan butter or refined oil, and swap cream with cashew cream or coconut cream.

Restaurant-Style Rich Version – Add 2 tablespoons of cashew paste to the gravy and increase cream to 100ml for extra richness and thicker consistency.

Paneer Makhani – Add 1 tablespoon of honey or sugar to the gravy and increase butter to 4 tablespoons for a sweeter, more indulgent version closer to makhani style.

Low-Fat Version – Use just 1 tablespoon of butter, skip the cream, and add 2 tablespoons of thick yogurt whisked smooth at the end for tang and body.

Spicy Dhaba Style – Double the green chillies and add 1 teaspoon red chilli flakes along with regular chili powder for extra heat.

Expert Tips for Paneer Butter Masala

Char the tomatoes directly on a gas flame or under a broiler until the skin blackens in spots. This adds authentic smoky flavour that defines dhaba-style cooking.

Do not skip the bhuna step. Cook the tomato puree on medium heat, stirring continuously until oil separates from the masala. This takes 8 to 10 minutes but develops the deep, caramelized base that makes the curry exceptional.

Add paneer only in the last 3 to 4 minutes of cooking. Overcooking makes paneer rubbery and tough. If using store-bought paneer, soak cubes in warm water for 10 minutes before adding to keep them soft.

Finish with cold butter off the heat for that glossy sheen. The butter should melt slowly into the gravy, creating the signature dhaba finish.

Kasuri methi must be crushed between your palms before adding to release its oils and aroma. Add it in the last minute of cooking for maximum flavor impact.

Balance the tangy tomatoes with a small pinch of sugar if your tomatoes are too acidic. Taste and adjust seasoning after adding cream, as cream dulls saltiness.

Use a high-sided pan or kadhai to prevent splattering during the bhuna process. The gravy will bubble and splutter as moisture evaporates.

For deeper color, add a small pinch of turmeric along with Kashmiri chili powder, but do not overdo it or the curry will taste bitter.

Dhaba-Style Paneer Butter Masala Recipe

Rich and creamy paneer butter masala with smoky dhaba flavors. Easy restaurant-style Indian curry ready in 45 minutes. Perfect with naan or rice.

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Prep Time 15 minutes mins

Cook Time 30 minutes mins

Total Time 45 minutes mins

Course Main Course

Cuisine North Indian

Servings 4

Calories 385 kcal

Ingredients

  

For the Gravy

• 500 g ripe tomatoes (about 5 medium)
• 2 medium onions, roughly chopped
• 5 garlic cloves
• 1 inch ginger piece
• 2 green chilies
• 2 tbsp butter
• 1 tbsp oil
• 1 bay leaf
• 2 green cardamom pods
• 1 inch cinnamon stick
• 1 tsp cumin seeds
• 1½ tsp Kashmiri red chili powder
• 1 tsp coriander powder
• ½ tsp turmeric powder
• 1 tsp garam masala
• 1 tsp kasuri methi (dried fenugreek leaves)
• Salt to taste
• 1 tsp sugar (optional, to balance acidity)
• 80 ml fresh cream
• 2 tbsp butter (for finishing)

For the Paneer

• 250 g paneer, cut into cubes
• Warm water for soaking

Instructions

 

Prepare the Base

• Char the tomatoes directly on a gas flame or under a broiler, turning occasionally until the skin blisters and blackens in spots. Let them cool slightly, then roughly chop.
• In a blender, combine charred tomatoes, onions, ginger, garlic, and green chilies. Blend to a smooth puree without adding water.

Cook the Gravy

• Heat 2 tablespoons butter and 1 tablespoon oil in a heavy-bottomed pan or kadhai over medium heat. Add bay leaf, cardamom, cinnamon, and cumin seeds. Let them sizzle for 10 to 15 seconds until fragrant.
• Pour in the tomato-onion puree carefully as it will splatter. Cook on medium heat, stirring frequently for 10 to 12 minutes. This bhuna process is crucial. The puree will thicken, darken, and oil will start separating from the sides.
• Add Kashmiri chili powder, coriander powder, and turmeric. Mix well and cook for another 2 minutes, stirring continuously to prevent burning.
• Add 1 cup water to achieve desired consistency. The gravy should be medium-thick, coating the back of a spoon. Season with salt and bring to a gentle simmer.

Finish the Curry

• Meanwhile, soak paneer cubes in warm water for 10 minutes to keep them soft. Drain before using.
• Add garam masala and sugar if using. Simmer the gravy for 3 to 4 minutes on low heat.
• Stir in the cream and mix gently. Add the drained paneer cubes and cook for 3 to 4 minutes on low heat, allowing the paneer to absorb flavors without becoming rubbery.
• Crush kasuri methi between your palms and sprinkle over the curry. Turn off the heat.
• Add 2 tablespoons cold butter and swirl the pan gently until it melts into the gravy, creating a glossy finish. Do not stir vigorously.
• Garnish with a drizzle of cream and serve hot.

Notes

Equipment – Heavy-bottomed pan or kadhai, blender, gas stove or broiler for charring.

Paneer texture – Always soak store-bought paneer in warm water before cooking. For extra-soft paneer, briefly pan-fry the cubes in butter until golden before adding to gravy.

Make-ahead – Prepare the gravy up to step 6 and refrigerate for up to 2 days. Reheat, then add cream and paneer fresh when serving.

Spice level – Kashmiri chili powder is mild. For more heat, add regular chili powder or cayenne pepper to taste.

Vegan adaptation – Use firm tofu instead of paneer, replace butter with vegan butter or oil, and use cashew cream blended from soaked cashews.

Consistency control – If the gravy becomes too thick, add warm water or milk. If too thin, simmer uncovered for a few extra minutes.

Color enhancement – For deeper red color, add a small pinch of red food color or beetroot powder, though Kashmiri chili should provide good color naturally.

Common Issues & Solutions

Gravy too thin and watery – Simmer uncovered on medium heat for 5 to 7 minutes longer to evaporate excess moisture. Alternatively, mix 1 teaspoon cornstarch with 2 tablespoons water and stir into the gravy.

Paneer becomes hard and rubbery – You overcooked the paneer. Next time, add it only in the last 3 minutes and keep the heat low. Soak tough paneer in warm salted water for 15 minutes to soften slightly.

Gravy tastes too acidic – Add half a teaspoon of sugar at a time until the acidity balances. You can also add an extra tablespoon of cream to mellow the tartness.

Oil separating excessively – This happens if you added too much oil or butter initially. Next time, reduce the butter to 1 tablespoon during cooking and add finishing butter separately.

Gravy lacks depth of flavor – You likely skipped the bhuna step or rushed it. The masala must cook until oil separates, which takes 10 to 12 minutes. Also ensure you charred the tomatoes properly for smoky notes.

Curry not creamy enough – Increase cream to 100ml or add 2 tablespoons cashew paste blended smooth with water. Make sure you simmer after adding cream for 2 minutes to integrate it fully.

Serving and Storage Suggestions

Serve paneer butter masala hot, straight from the stove, with a drizzle of cream and fresh coriander on top. This curry pairs perfectly with butter naan, garlic naan, tandoori roti, or steamed basmati rice. For a complete dhaba-style meal, serve alongside jeera rice, laccha onions, green chutney, and a simple cucumber-tomato salad.

The dish works beautifully for weekend family dinners, dinner parties, or festive occasions like Diwali and Holi. It also makes excellent meal prep since the flavors deepen overnight.

Storage – Refrigerate leftovers in an airtight container for up to 3 days. Reheat gently on the stovetop with a splash of water or milk to restore consistency. Freeze the gravy without paneer for up to 2 months. Add fresh paneer after reheating for best texture.

Pairing beverages – Serve with salted lassi, sweet lassi, or masala chai for an authentic Indian meal experience.

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