To those having isses even after removing index and cannot do a reset. If you want to keep your changes do the following (not a solution but rather an ugly workaround!).
Make backup of your files, what I am about to say should work but do it just in case.
Remove the .git folder
Clone your repository (does not matter where) I did it in the current directory
Copy the created from the clone .git directory into your current directory
Remove the cloned directory
6. Optional, if you used a branch checkout to it again
Git status should now track changes as it is supposed to and all your git commands should work
My case was as described above, git had messed up its references... Git log was showing "your branch seems to be broken" and git fsck was giving me warnings about bad references. Figured if I can probably fix it but I'd spend a lot of time doing it, so I went for the ugly workaround.