No, you don’t, not if you qualify for the deduction.
Please see Line 7 – Military Service Deduction in Indiana’s IT-40 Full-Year Resident Individual Income Tax Booklet found at 2021 Individual Income Tax Forms - DOR and INFORMATION BULLETIN #27 for more information.
(Just as a frame of reference – if you claim a deduction, that lowers your tax. If you weren’t entitled to the deduction, you wouldn’t pay back the deduction amount, just the amount of tax that was reduced.)
