The correct way is to install the flange on top of the finished floor. It must be anchored well, and be sitting flush on top of the finished floor. It is not uncommon to take the shortcut and leave in on the subfloor, but then it is lower than it was designed to be which give it more opportunities to leak since you need a thicker wax ring to make the seal which can be blown out if you are too aggressive when plunging a clog. To make it easier on yourself, notch the tile so you only have to drill anchors into the concrete, which is much easier than cutting through some really tough floor tile.