Take warm milk and water, add it in a bowl.
Add yeast in the bowl and keep it aside for 5 minutes until it froths.
After 5 minutes, melt butter and add in the yeast mixture along with sugar, eggs and mix well until sugar is dissolved.
Add salt, vanilla essence and mix well.
Now add 2 cups of All purpose flour to the wet ingredients and mix well using wooden spatula.
On a flat surface, add rest of the all purpose flour and knead well until a non sticky dough is formed. (do not knead too much, knead for 5 minutes)
Now place the dough in bowl and cover it and keep for minimum of 1 hour.
After 1 hour, the dough would have doubled in its size.
Take the dough and place it on the flat surface and roll it to a big circle of 1/4 thickness.
Use a donut cutter to cut the donuts and place it on the tray dusted with APF. (All purpose flour)
Cover the tray using damp cloth and leave aside for 1 hour or until the donuts has doubled its size.
Take a vessel and heat the oil until 375°F or 160°C.
Place the donuts one by one in the oil and fry it.
Fry it on one side until you see the golden brown on the inside ring.
Turn it and cook both the sides of donuts until golden brown.
Place them on the cooling rack.
For the glaze:
Take 1 cup powder sugar, add vanilla essence and add water gradually to get a thick sugar syrup.
Take each donut, dip it in sugar syrup and keep it on the cooling rack and allow it to cool. Serve hot