This post contains affiliate links. Please see our disclosure policy.
Restaurant Style Tofu Butter Masala Recipe – Easy Indian Butter Tofu “Paneer”. Dairy-free Tofu Paneer Butter Masala. Tofu is marinated and baked then simmered in tomato ginger cashew sauce. Vegan Butter Tofu Gluten-free Recipe. Jump to Recipe

You have got to make this Butter Tofu! Butter Tofu, Butter Masala or butter curry or whatever you want to call it. Red butter sauce for everything. Butter masala sauce is a popular sauce used with meats, paneer cheese or vegetables in Indian restaurants (that have a mostly North Indian Menu). It can be called makhani sauce (translates to “buttery” sauce) or butter sauce. Each restaurant can have its own version of sauce. I generally use my makhani sauce to make butter masala with veggies, tofu,chickpeas or fake meat. That makhani sauce is a rich creamy general masala sauce that makes everything taste amazing.
This butter sauce is a simpler and more restaurant like variation and can be used with veggies, chickpeas or any other additions. I use baked tofu to work as “paneer” to make a Butter Paneer. Serve with flatbread, rice, Roti or Vegan Naan. No Butter in this sauce. Feel free to use vegan butter instead of oil.
Video:

More restaurant style Indian Mains from the blog
- Mushroom Matar Masala
- Bombay Potato and Peas
- Tofu Pasanda
- Tofu Matar Masala
- Tofu in Spinach Curry – Saag Tofu
- Vegetable Jalfrezi – Veggies in smoky tangy curry
- Gobi Broccoli Makhani
- Tempeh Tikka Masala with Kale
Like this recipe? Then there are 20 more options in my Indian Kitchen book.
Tips and Troubleshooting:
- Troubleshoot: If the sauce flavor has a bitter after taste, it could be from ginger(over mature ginger can be bitter, use young juicy ginger), from the tomatoes that have not roasted well (cook them longer on medium low heat to roast well), or a larger amount of Kasuri methi (dried fenugreek leaves, use less).
- Fenugreek leaves are the only ingredient in this recipe that needs to be either ordered online or picked up from an Indian store. To sub use 1/4 tsp powdered fenugreek (fenugreek seed powder), or 1/4 tsp ground mustard. Do get some fenugreek leaves as they are used in many Indian sauces and have a fabulous authentic flavor profile. Try the Instant Pot Version of Vegan Butter Chicken here.
- Soy-free: This recipe can be easily made soy-free with Chickpeas, seitan, Chickpea tofu or Veggies.
Step by Step Photos:
Marinate the Tofu, then bake.

Baked and ready for sauce.

Some elements of this recipe are inspired by Manjulas Kitchen and Veg Recipes of India Paneer butter masala recipe.
Make the Butter Sauce. I use canned diced tomatoes as they give a deeper color.

Fold in the Tofu, sliced ginger and sliced green chile. Serve hot with Roti or Naan. Let me know in the comments how it worked out! Please also rate the recipes.

What is Butter Masala
Butter Sauce, or makhani or butter masala sauce is a creamy tomato based sauce often found in Indian restaurants. It is a mild savory sweet creamy sauce that is often served with meats or paneer cheese (butter chicken or butter paneer). Versions differ based on restaurants and chefs and i have slightly different versions on the blog and my book too. Try all the sauces with this baked tofu to find the one that you love!
To make more like a restaurant version, add more oil and vegan butter 🙂

Butter Tofu Paneer - Restaurant Style Tofu Butter Masala Recipe

Ingredients
Baked Tofu "Paneer"
- 12 oz firm tofu, pressed between paper towels for 10 minutes, then cubed
- 1/2 tsp each of garam masala, ,paprika, salt, and turmeric
- 2 tsp ginger paste , or minced ginger
- 2 tsp garlic paste or minced, or 3/4 tsp garlic powder
- 2 tsp lemon juice
- 1.5 tsp water, 1/2 tbsp
- 1.5 tbsp cornstarch, or other starch such as arrowroot
- 1 tsp nutritional yeast, optional
- 1 tsp oil
Butter Sauce:
- 1 tsp oil , or vegan butter
- 3 cloves of garlic finely chopped
- 3 large ripe tomatoes , or 1 15 oz can diced tomatoes
- 1 inch cube of ginger, 1/2 inch chopped, 1/2 inch julienned or thinly sliced into sticks
- 1 hot or mild green chile juilenned or thinly sliced, or use very thinly sliced green bell pepper
- Cashew cream made with with 1/4 cup soaked, 15 mins cashews blended with 1/2 cup water
- 1/2 tsp garam masala
- 1/2 tsp paprika , or kashmiri chili powder
- 1/4 to 1/2 tsp cayenne
- 1/2 cup water
- 1 tsp kasooori methi - dried fenugreek leaves
- 1/2 tsp salt
- 1/2 tsp sugar or other sweetener, to preference
Instructions
Bake the Tofu:
- Press and cube the tofu if you havent already. In a bowl, mix the rest of the ingredients under baked tofu, to make a marinade. Add tofu and toss well. Let it sit for 15 min (optional). Preheat the oven to 400 degrees F / 200ºc. Place the tofu cubes on parchment lined sheet. Bake for 15 to 20 minutes.
Make the Butter Sauce:
- Heat oil in a skillet over medium heat. Add garlic and cook until golden. You can also add in 1 bay leaf and 1 cinnamon stick with the garlic for additional flavor. Remove these before serving.
- Puree the tomato with the chopped ginger and half the green chile. Add to the skillet and cook until the puree starts to thicken and does not taste raw tomatoey. Dont wash the blender.
- In the same blender, blend the cashews and water until smooth. Blend the cashews for a minute, let it rest for a minute and then blend again for about a minute for a creamy result. Works with unsoaked cashews. Or use premade thin cashew cream (about 1/2 cup).
- Reserve 1 tbsp of the cream for garnish. Add the rest of the cashew cream to the skillet. Add spices, fenugreek leaves, salt and sugar and mix well. Use 1/2 cup water to rinse out your blender and add to the skillet. Mix and Bring to a boil. Taste and adjust salt, heat (add cayenne) and sweet. Add more water if needed for preferred consistency. Add more cashew cream for creamier.
- Fold in the baked tofu. Simmer for a minute. Mix in the julienned ginger and green chile. Alternatively, mix half of the ginger and chile and use half as garnish. Add a drizzle of the cashew cream and other garnishes as pepper flakes, chopped cilantro. Serve over Easy Garlic Naan, rice or roti.
Video
Notes
With soy curls: Add 1 cup soy curls directly to the skillet at step 4 with cashew cream and 1 cup of water. Simmer for 10 minutes. Nutritional values based on one serving Nut-free: Use coconut cream (thick white part from a can of full fat coconut milk) To sub fenugreek leaves: Use 1/4 - 1/3 tsp powdered fenugreek (fenugreek seed powder), or 1/4 tsp ground mustard. No onion garlic; this recipe is already onion free. Use zucchini to sub garlic in the sauce. Add 1/2 tsp more fenugreek leaves to balance the flavor.
Nutrition
Nutrition information is automatically calculated, so should only be used as an approximation.










I just made this and it turned out fantastically good. I didn’t have dried fenugreek leaves but I did have frozen ones that I bought in the local grocery store in the Indian section. So I just used fresh fenugreek leaves. This one’s a winner and I’m definitely making it again! Thanks for the recipe.
perfect!! Thank you
I am going to try this recipe tomorrow with Soya Chaap. Lets see how that turns out. The gravy looks exciting.
Thank you for this recipe; this has become my go to recipe whenever I have soya in the fridge…I love it. Today, I added cubed sweet potato; marinated and baked along with the tofu cubes. Very yummy!
Awesome
Loved the sauce, but definitely not satisfied with the tofu texture & bite (we are newly converted vegans) Would Burmese tofu be a better paneer replacement you think?
Burmese tofu will taste very beany like gatte ki subzi. Try different brands and types of tofu. Many brands are too soft and bake more chewy while some brand extra firm ones are sturdy and you might not even need to bake them. Some taste too beany or too smooth and all that.
Hi Richa, great recipe! Can I substitute with almond paste instead of cashews? My son has but allergies (except for Almonds and coconut). I feel like the coconut milk will change the North Indian taste and make it more like a South Indian kurma
Yes use blended almonds. Or use a mix of both coconut milk and almond paste if the almond paste is too gritty
Thank you for this luscious recipe! The baked tofu is wonderful, and I like that this separate step can be done, say, in the morning or the day before. You mentioned that you have different versions in your book, Indian Kitchen. So I looked in my book and found similar sauces here: Tempeh Tikka Masala, and Cauliflower with Makhani Gravy. I’ll try those too, but can’t imagine how they would top this. Yummy. Again, my thanks.
I made this yesterday and I cannot get over how tasty this was! My partner said it was better than any takeout we have had. I just wish I had doubled the recipe so I could eat it again tonight! I served it with the Cauliflower Kofta’s, rice, garlic spinach and naan. This is going to be one of our regular meals now, I will be batching and freezing the sauce. Thank you for the best meal I have had in lockdown!!
Thank you for stopping by, I’m so glad you enjoyed this recipe!
So tasty! I loved tofu texture, amazing!
Glad you enjoyed it.
I made this and it turned out Ah-Mazing!!!!! Tofu was not dry and everyone at home loved it! Even the fussy eaters!!!!
yay
How many mL or cups is equivalent to chopped fresh tomatoes?
1.5 cup to 2 cups