Paneer can be used in make a variety of delicious curries, parathas and several Indian sweets.
Whole milk - 1/2 gallon or 2 litres
Vinegar/lemon juice - 2 tablespoon
In a heavy bottomed vessel, take the milk and bring it to a boil. Keep stirring in between, because the milk tends to stick to the bottom of the vessel.
After a minute or two, the milk separates into the whey and paneer and forms a cloudy texture on top. Keep stirring occasionally. In about five minutes, the milk should be completely seperated into whey and paneer. Switch off the heat and leave it to sit for about 5 to 10 minutes.
Slowly pour the whey-paneer mixture and strain the paneer. Take care because it should be really hot.
Squeeze out the excess water from the paneer. Store the whey and use it for kneading chapati dough, in soups and stews because it is very healthy. You could refrigerate/freeze it and use later.
Make a knot in the cloth with the paneer and hang it for about an hour so that the whey water completely strains out. Alternatively you could place the cloth wrapped paneer in a plate and place some heavy object on top for about an hour so that the water gets squeezed out.
Paneer is ready. You can slice the paneer and use it in various dishes. Refrigerate the paneer immediately.
Place the paneer in a container filled with water if refrigerated. it should be stored in water similar to tofu.
Some dishes with paneer:
Simla Mirch Paneer/Cottage Cheese in a bell pepper gravy
Paneer Butter Masala
Mutter Paneer/Paneer Peas Curry