Cut the paneer into cubes and soak in the asafoetida water to make paneer warm and softer. Meanwhile chop the onion and tomato.
Now heat oil in a pan and crackle cumin seeds. Add onion and fry till it turns light pink in color. Add dry spices. Add chopped tomato and ginger paste. Fry till the tomato mix is cooked completely.
Now add capsicum and cook until capsicum is tender. Drain the water form paneer and add the paneer cubes in the pan. Mix slightly so that paneer cubes are not broken. Cook until the capsicum is cooked.
Paneer Capsicum sabzi is ready. Serve it hot with chapati / paratha / naan.