Fly ash (FyA), a byproduct from coal combustion in power plants, has become increasingly valuable due to its pozzolanic properties. Primarily, FyA finds applications in the construction industry, including road and brick construction, forest road building, and the cement industry. When added to concrete, it enhances splitting tensile strength, compressive strength, and workability, while also reducing the environmental impact of cement production. Beyond construction, FyA is utilized for air pollutant removal and serves as an adsorbent for various contaminants. It also plays a role in creating geopolymers and nanocomposites, promoting the development of eco‐friendly construction materials. This review article presents current data on thermal power plants (ThPPs) in India, the challenges in FyA management, and its environmental impact. It also discusses relevant Indian policies and highlights ongoing research aimed at improving the efficiency and expanding the applications of FyA in various industrial sectors, such as battery manufacturing, zeolite synthesis, and cenosphere extraction. These efforts underscore FyA's potential in supporting sustainable practices. The findings of this review address critical issues related to FyA. By reducing the environmental footprint of cement manufacturing, removing air pollutants, and acting as an adsorbent for various contaminants, FyA demonstrates significant potential in pollution mitigation. It also contributes to the development of eco‐friendly construction materials and promotes sustainability in the construction sector. Effective management practices are essential to minimize FyA's negative impact on human health and the environment. The article emphasizes the need for greater awareness and implementation of policies to address these issues comprehensively. By providing a detailed understanding of the benefits and challenges associated with FyA, it aims to pave the way for more effective and sustainable utilization of this industrial byproduct.