For best results, thaw frozen paneer overnight in the refrigerator. If you don't have time for that, leave it out at the counter for a few hours until it thaws partially.
Cut in Cubes
Cut the whole paneer into 1-inch cubes. Leave it on the kitchen counter for at least 30 minutes, and up to 2 hours.
Follow ONE of the following ways:
Soak in Hot Water
Fill a medium size bowl with warm water (about 110 degrees F). Immerse the paneer cubes into the water, making sure all parts of the paneer are fully submerged. Allow to sit for 5-10 minutes, then drain.
Steam
Add ½ - 1 cup water to a deep frypan and bring it to a boil. Turn off the heat and place a steamer tray or basket on top.
Place the paneer on the tray and cover it with a lid. Leave aside for 10-15 minutes, until the paneer is softened.
Boil
Add 2 cups of water to a small saucepan and bring to a boil. Drop in the paneer cubes and boil for 30 seconds - 1 minute.
Strain and immediately set in a bowl of cool water for 10 minutes. Drain and proceed with your recipe.
Pan Fry
Set a medium non-stick skillet over medium-high heat. Add 1-2 tablespoons oil or ghee, and allow to heat for 1 minute.
Add paneer cubes and toss every 10-15 seconds, until the paneer is soft and the edges are a light golden brown. This should take about 2-3 minutes in total.
Notes
Soaking: Do not soak the paneer for more than 10 minutes, or it will break down and lose its taste and texture.
Boiling: Soaking the paneer in cool water after boiling keeps it soft during cooking. Otherwise, it will turn hard and rubbery.
Pan frying: Keep in mind that pan frying will add an additional amount of fat and calories.
Frozen: It is best to thaw the paneer overnight in the refrigerator, or on the kitchen counter for 2-3 hours.
Note: The nutrition facts below are my estimates. If you are following any diet plan, I recommend cross-checking with your preferred nutrition calculator.