Thirteen million families will lose an average of £260 each year because of the change to working-age benefits, the Institute for Fiscal Studies (IFS) has said.
Reacting to the first all-Conservative Budget in 19 years, the IFS said it was "regressive" and had taken "much more" from the poor than the rich.
George Osborne earlier defended his Budget, saying it represented a "new contract" for Britain.
The Chancellor has insisted that millions of Britons will be better off because of his changes to tax credits.
Speaking to Good Morning Britain, George Osborne said that six million people will be on higher pay because of a "ripple effect" through the economy.
"If you are a typical family and working full-time on the current national minimum wage - because of the national minimum wage and because of the welfare savings we've made - you will be better off," he said.
"And for those working on salaries a bit higher than the current minimum wage, you'll also be better off because there will be a ripple effect as wages rise... that will mean six million people with higher pay."
The Chancellor said his Budget - the first Tory Budget in 19 years - was offering "a new contract" with the country as the Government made "difficult decisions" with welfare but added: "The country has to live within its means."
Asked whether his Budget was part of his strategy to get his hands on the key for Number 10, Osborne wouldn't be drawn on the issue.
"I fancy being Chancellor of the Exchequer.. that's what I'm focused on."
Describing the changes as a 'new contract' for Britain, the Chancellor later reiterated the benefits of the Budget via Twitter:
Since the Budget, a cascade of analysis has crashed across our screens and squirted ink over our newspapers - much of it missing the point.
This afternoon, the Institute for Fiscal Studies presented a damning analysis of George Osborne's Budget. Here we explain the key points.
The Chancellor's "Living Wage" is considerably lower than the rate the Living Wage Foundation campaigns for but this is still a bold move.