I started getting that following error "Error: bad index file sha1 signature index file corrupt" when using Git Extensions
Somehow my index got corrupt and the only solution worked for me was to run the following commands into my GitBash for my repository:
rm -f .git/index
Please make sure you make a backup copy of your repository before running the above two commands.
The purpose of the above commands is to remove the index and then restore index to version in the last commit.
After running the above two commands my index got fixed and was no longer corrupted any more.