Paneer Capsicum Masala -Easy everyday sabzi recipe (Indian stir-fry) made with soft paneer cubes, crunchy green bell peppers, and aromatic bhuna masala. It’s easy, vegetarian, protein-packed sabzi, and perfect with roti, rice, or as a wrap or inside sandwiches.
Capsicum paneer is more than just a sabzi recipe—it’s a little slice of my childhood, sizzling in a pan. My mom made this dish like clockwork, especially on school mornings when lunches had to be packed quickly. She’d toss soft paneer cubes with crunchy green capsicum and her signature bhuna masala, and just like that—lunch dabbas were filled with the perfect trio: hearty paneer, crisp capsicum, and warm, homemade parathas. Healthy, comforting, and 100% mom-approved.
It’s perfect with phulkas, parathas, or even sandwiched between slices of toast for a quick snack. It’s my go-to for those “I want something comforting but not too heavy” moments.
Oh, and if you’re a fellow paneer fan (hi, soulmate!), there’s a whole world of paneer recipes waiting for you. From creamy paneer butter masala to spicy methi paneer malai, cozy palak paneer, or even a zippy achari paneer —there’s something for every mood and meal. I’ve been slowly building my own collection of tried-and-tested paneer recipes, so stay tuned. And if you’ve got a favorite you swear by, I’m all ears—drop it in the comments and let’s swap secrets like true desi foodies!
What is paneer capsicum masala
This is a semi-dry paneer sabzi recipe made by first making the masala base with onions, tomatoes, and then cooking the capsicum al dente before adding the paneer.
Paneer is an indian cheese that's firm, holds up well while cooking, and is a favorite form of protein for most vegetarians. So next time you are cooking for vegetarian guests, this is a great choice.
How to make paneer capsicum
I am not lying here but this is my mother's goto recipe-it's served every time important guests come home, it was served when my inlaws came home for the first time, it was served when my husband and I visited home the first time after marriage.
That said, when you read the recipe—don’t come for me! It’s not one of those “fry till you die” situations. It’s simple, balanced, and totally in sync with my mom’s personality: warm, no-fuss, and absolutely fabulous.
This recipe can be made start to end in about 15 minutes.
Step 1: Gather the ingredients
Cut the paneer into 1-inch cubes. Soak it in hot water with a dash of vinegar till you get everything else organised.
Chop half the onions finely and leave the other half in big cubes. Cut the capsicum into ½ inch squares. Feel free to use any bell pepper- red, yellow, green, or orange.
Step 2: Make the base sauce
Start with heating a pan over medium heat. Add oil.
Add the onions and stir fry till they turn slightly brown- golden. Add the ginger garlic paste. You can even opt to add chopped or grated ginger and garlic.
Reduce the heat to a low. Give it a mix and then follow it up with the spices. Stir fry the spices for 30 seconds, before adding chopped tomatoes.
Cook this down till the oil separates. You can choose to stop earlier if you do not have time. The recipe is quite forgiving.
Add salt.
Step 3: Add paneer and capsicum and quick cook
Once the sauce is ready, you can add the cubed capsicum. Cook on high for 1 minute till the capsicum gets darker but still holds shape. Add paneer and mix.
Top with fresh coriander, a squeeze of lemon, and serve warm. Your kitchen will smell like a dhaba, and your heart will be full.
Hot Tip- Soft paneer
Soak your paneer in hot water and a teaspoon of vinegar till you are ready to add it to the dish.Thank me later!
Tips and Tricks
Quicker Bhuna Masala -Instead of spending too much time cooking down the masala, my mother usually adds a spoonful or two of tomato puree or a smidge of tomato paste to help with the colour and the browning.
Crunchy Capsicum - The capsicum and the paneer are added towards the end and barely cooked to maintain their structural integrity.
Serving
- With Rotis or Parathas: The classic combo. Soft rotis or parathas are perfect lunch box options.
- Over Jeera Rice or Steamed Basmati: Want to make it a little fancier? Serve it over a bed of cumin-scented rice or peas pulav. The spices in the bhuna masala play beautifully with the mild rice.
- As a Wrap or Roll: Stuff it into a warm paratha or wrap with a smear of chutney, maybe some onions, and boom—lunchbox gold.
- Alongside a Dal or Raita: Pair it with something cooling like boondi raita, dahi tadka or a simple dal for a more complete, comforting meal.
- Thali Style: Go full desi and add it to a mini-thali setup with cucumber salad, pickle, papad, and maybe a dessert (kheer, anyone?).
Mom's Paneer Capsicum
Ingredients
- 1 Tablespoon Oil
- 1 Cup Onion or 1 large onion; half chopped, half cubed
- 1 Cup Tomatoes 1- large tomato , chopped
- ½ Teaspoon Tomato paste
- 1 Green Bell Pepper Capsicum cut into ½ inch squares
- 1 Tablespoon Ginger garlic paste optional
- 2 Cups Paneer 1 inch cubes ; 250 grams
Spices
- 1 Teaspoon Whole Cumin
- 1 Tablespoon Coriander Powder
- ¼ Teaspoon Red chili powder can be increased to 1 teaspoon for spicy version
- ½ Teaspoon Turmeric
- Salt to taste
Instructions
- Add oil to the pan and heat on medium high heat.
- Once the oil is hot, add the cumin. Let it splutter. Add the chopped onions.
- Stir fry till they turn slightly golden brown. Reduce the heat to medium.This should take 5-6 minutes. If you are short on time, you can stop when the onions turn translucent.
- Add the ginger garlic paste if using. Mix and cook.
- Next, add the spices- coriander powder, turmeric and chili powder. Saute for 10 - 20 seconds-making sure the spices dont burn.
- Add in the chopped tomatoes along with their juices and the tomato paste.
- Cook it covered, stirring often, until the tomatoes have softened -takes about 5 minutes. Add a tablespoon of water if the masala is burning or looks dry.
- Add the capsicum and cubed onion.Cook for about 30 seconds.
- Next add in the paneer and mix everything together. Cook for 30 seconds. Top with coriander and serve hot.
Notes
Swaps and substitutes
- Paneer - Tofu is a great dairy-free substitute. Check out more options in this paneer post.
- Capsicum- Also called shimla mirch in India. Use any mild peppers- red, yellow, or orange.
Notes on cooking
- Use tomato paste while making bhuna masala to give it more depth without cooking the tomatoes down for too long.
- If you are short on time, do not brown the onions too much.
- Fillings - To make this for sandwich and wrap filling- dry out the bhuna masala more, cut the paneer and capsicum smaller.
Nutrition
More Paneer recipes
Here are more paneer recipes I think you will love.
Tips on Cooking with Paneer
Quick Paneer Rescue Tip (From One Frustrated Paneer Lover to Another!)
Let’s be real—getting your hands on soft, fresh paneer isn’t always easy. I wish we all had access to that dreamy melt-in-your-mouth paneer, but nope. My mother-in-law literally hauls fresh paneer from Bangalore because, let’s just say, the Chennai paneer scene is a tragedy.
But don’t worry—I’ve got a trick to revive even the saddest, driest paneer blocks:
✨ Soak them in warm water with just a dash of white vinegar. ✨
That’s it! It works like magic. In fact, I even store fresh paneer in a box of water and vinegar in the fridge. It keeps it soft, moist, and happy for nearly a week.
Also, hot take—I never cook or fry my paneer. Why? Because cooking makes it rubbery and chewy, and that’s not the vibe I’m going for. Plus, let’s be honest—I’m way too lazy for all that frying nonsense. Totally unnecessary in my book.
If you found this tip helpful, drop me a note—I’d love to know! And if you try it and love it, a little review on the blog would make my day.
FAQs
It can be, but you control the heat. The exact recipe is mild because I use kashmiri chili powder.
Yes, thaw it first for the best texture.As explained above, to make paneer soft, soak it in hot water and vinegar.
Don’t overcook it, add it towards the end! Light sautéing or soaking in warm water before cooking helps.
Totally—use tofu instead of paneer.
Sure! Try peas, carrots, beans, mushrooms, or corn.
Yes! speaking from almost 10 years of eating this ever week in my school lunchbox!
Durba says
Amazing fool proof recipe! Thanks Chhavi (and Aunty 😊🙏🏼)