Heat up about half a gallon of milk.
When the milk starts boiling and rising up , just switch off the stove.
Squeeze a lime right on top of the boiled milk immediately after switching off the stove. You can either use juice of a lime or you can use vinegar. Keep adding little by little until you see the water separating out from the whey. Stop adding more lime juice or vinegar.
You will need either a cheesecloth or a muslin cloth to hang the paneer. But as you can see, I don't have either of those. Every time my mom visits me here, she brings her thin towels to dry up her hair after a shower. I used one of her new ones and cut into into small pieces! Oops. Just don't tell her! These work perfect. They are cotton and hence all the water just flows down through the fabric.
Once the water is almost out, wrap the towel around the paneer tightly and let it just sit. I was making this to make crumbled paneer. If you want to make really firm paneer, add some weight on top of the towel.
After a couple of hours, your homemade fresh paneer is ready to use!
I used 1% fat milk to make this paneer. This is so much more healthier than the full fat paneer available in stores. It takes about 10 mins to prepare and is much more healthier.
I do have to confess that I have had many many trials and tribulations and wasted milk trying to make paneer. I've made paneer that when thrown can break walls apart! I've made panner that was like some paste. So, after many attempts, I saw a video online and learnt how to make it. The key is to switch off the stove when the milk is boiling and then add the vinegar or lime. That just works fine.
So, if making paneer intimidates you, don't worry anymore. Just try it again and again till you get it - one taste of the fresh homemade paneer - you will never go back to buying the preservative-laden store stuff.
Good luck and Happy Paneering!