Both way are often used in the USA. The tolerances should be based on the intended typical manufacturing process capabilities.
In the rest of the world, they use ISO 286 part I and II OR ISO 2768 as well as other manufacturing specific industry standards. On the engineering drawing there might be a note that reads:
UNLESS OTHERWISE SPECIFIED, TOLERANCES ARE PER. ISO 2768, Class M
In my view, what we do in the USA is inferior and prone the miss-specification relative to function and manufacturing capabilities to what is done in the EU and Asia etc..