MSPs on the finance committee will look at what the new Scottish rate of income tax (SRIT) should be set at when it comes into effect next year.
The new powers are part of the 2012 Scotland Act.
The move means the UK Treasury will deduct 10p from standard and upper rates of income tax in Scotland, with MSPs then deciding how to raise cash.
The committee will also consider if companies and individuals are prepared for the introduction of the new levy in April.
The new powers will mean people north of the border could potentially pay a higher or lower rate than taxpayers in the rest of the UK.
As part of its work scrutinising the 2016-17 budget, the finance committee will consider what the extra cash raised could be spent on if the SRIT is higher than 10p.
They will also look at how any reduction in the SRIT could be funded from the Scottish budget.
Committee convener Kenneth Gibson said: "From next year, revenue from the Scottish rate of income tax will be a significant part of the money spent on Scotland's public services.
"There are key decisions to be made on the level the Scottish rate should be set at and how taxpayers and employers are informed about the introduction of SRIT."
He added: "It is important for the finance committee to scrutinise the introduction of this new power and I would encourage people to submit their views to inform the committee's inquiry."
Earlier this week a new Scotland Bill was published by the UK government.
The 76-page document outlined the Conservative government's plan to give tax-raising powers to Scotland.
It follows recommendations made by the cross-party Smith Commission which was set up to look at devolving more powers.
The use of new powers to raise or lower income tax in Scotland is to be considered by a Holyrood committee.