Soak cashews in a hot water for 20 to 30 minutes. When the cashews are soaking, you can prep the other ingredients like chopping tomatoes, preparing ginger-garlic paste, slicing paneer etc.
Then drain and add the soaked cashews in a blender or mixer-grinder.
Add 2 to 3 tablespoons water and blend to a smooth paste without any tiny bits or pieces of cashews.
In the same blender add the roughly chopped tomatoes. No need to blanch the tomatoes before blending.
Blend to a smooth tomato puree. Keep aside. Don’t add any water while blending the tomatoes.
Making tomato gravy
Melt butter in a pan on a low flame. Add tej patta and fry for 2 to 3 seconds or till the oil become fragrant.
Add ginger-garlic paste and sauté for some seconds till the raw aroma disappears.
Add the tomato puree and stir well. Cook for 5 to 6 minutes. Then add kashmiri red chili powder and stir again. Continue to sauté till the oil starts to leave the sides of the tomato paste. The tomato paste will thicken considerably and will start coming together as one whole lump.
Then add cashew paste and stir well. Sauté the cashew paste for a few minutes till the oil begins to leave the sides of the masala paste.
The cashew paste will begin to cook fast. Approx 3 to 4 minutes on a low flame. So keep stirring non-stop.
Making paneer butter masala
Add water and mix very well. Simmer on a low flame.
The curry will come to a boil.
After 2 to 3 minutes of boiling, add ginger julienne. Reserve a few for garnishing. The curry will also begin to thicken.
Add julienned ginger and green chillies, salt and sugar and simmer till the curry begins to thicken.
After 3 to 4 minutes, add slit green chillies. also add salt as per taste and ½ to 1 teaspoon sugar (optional).
You can vary the sugar quantity from ¼ tsp to 1 teaspoon or more depending on the sourness of the tomatoes. Sugar is optional and you can skip it too. If you add cream, then you will need to add less sugar.
Mix very well and simmer for a minute.
After the gravy thickens to your desired consistency, then add the paneer cubes and stir gently. i keep the gravy to a medium consistency.
After that add crushed kasuri methi (dry fenugreek leaves), garam masala and cream. Gently mix and then switch off the flame.
Garnish it with coriander leaves and ginger julienne.
You can even dot the gravy with some butter or drizzle some cream.
Serve paneer butter masala hot with plain naan, garlic naan, roti, paratha or steamed basmati or jeera rice or even peas pulao.
Side accompaniments can be an onion-cucumber salad or some pickle. Also serve some lemon wedges by the side.
Butter: Use good quality butter. You can add both unsalted or salted butter. Also both yellow butter or white butter can be added.
Tomatoes: It is best to use fresh, ripe red tomatoes. Add tomatoes which have sweet-tangy taste. Do not add tomatoes which are too sour or tart.
Tomato puree: Blend the tomatoes to a smooth puree. If you want you can strain the tomato puree also.
Sautéing tomato puree: The tomato puree has to be cooked and sautéed very well. Oil or butter should leave sides of the cooked tomato puree so that the raw flavor of tomatoes is not felt in the dish.
Paneer: Best to use homemade soft paneer or a good quality store brought fresh paneer
Cream: The amount of cream can be adjusted as per your taste.
Cashew paste: To blend cashews to a fine consistency, it is better to soak them in hot water for 20 to 30 minutes. Use a good blender to get a smooth creamy cashew paste.
Replacing cashews: If you don't have cashews then add almonds. Blanch the almonds in hot water for 30 minutes. Then peel and blend them till smooth with some water.
Sugar: Addition of sugar depends upon your taste as well as the tanginess present in the tomatoes. So add as per taste. If you add cream then you might have to add less sugar.
Taste and flavor: If the butter paneer masala gravy tastes tangy or sour, then to balance the sour taste you can add a bit of sugar or cream. But do not add too much sugar as then the gravy becomes too sweet. Also, do note if you add cream then you might have to add less sugar in the sauce or gravy.
Color: To get the bright orangish-red color, its best to use kashmiri red chilli powder or deghi mirch instead of artificial food colors. Using deep red colored tomatoes also contribute to a lovely orange color in the gravy.
Frying paneer (optional): You can fry the paneer cubes if you want and then add in the prepared sauce or gravy.