I am installing tile in bathroom so the toilet flange is now about approx. 1/2" below the tile. Do I have to remove the toilet flange or are there extensions?

I think you'll be able to use the flange where it is.
Pick up a set of longer closet bolts and a wax ring with a funnel attached. You may wish to purchase a additional wax ring in case one won't extend up far enough. TIP: If you use two wax seals, tale a knife and bevel the wax from the inside out. That way any extra wax will be forced to the outsode instead of inside where it could block the flush. Good luck, Tom