Bring milk to a boil in a heavy bottomed stock pot, stirring frequently. As soon as the milk starts boiling (around 212F), remove from heat.
Stir in yogurt. Add 1/2 tbsp lemon juice and stir. Add more as required until the milk curdles and separates from the whey.
Place a cheese cloth in the bottom of a large bowl or in the bottom of a strainer. Pour the curdled milk into the cloth. Bring the sides of the cloth together and tie it. Wash it in running water to remove any lemon flavor. Hang the bundle over a bowl. Gentle squeeze to remove any excess water. Leave for 20 minutes.
After 20 minutes have passed, shape the bundle into the shape you would like your paneer to be (but don't remove it from the cheese cloth!). Place the shaped bundle in a shallow pan and place a heavy object on top of it. Let rest for 30 minutes.
After 30 minutes, unwrap the cloth and enjoy! The paneer may be kept in the refrigerator in a zip-lock bag for up to one week or frozen for longer.