Take a sauce pan and pour 1 lt milk and turn on the heat. With a spatula stir occasionally so the milk doesn’t stick to the bottom. Let it come to a boil then turn off the heat. Mix the vinegar with equal amount of water and slowly pour it into the milk and watch how it starts coagulating. Stir gently. In a strainer, place the cotton cloth and pour the chhana. You can save the yellow water for other use ( such as kneading flour, making soup etc). Now wash the chhana with cold water and secure the cloth with a knot. Place it on a flat area preferably in the sink and put some heavy object like a cast iron pan or a gallon of water on top of it to discard the water for around 30 minutes. You have now made soft paneer or chhana!